Experience keeps a dear school, but fools will learn in no other
As everyone knows I’m a big advocate of the Free Market. the Market free to make its own decision based on their own self-interest tends to create a stronger economy as all sides do their best to compete for the dollars of the customer base.
That’s why in the latest version of the great Demoulas wars pitting two Demoulas cousins, Arthur T, vs Arthur S against each other , I would, if on the board of directors vote with Arthur T.
Let’s look at the facts. what is the case for removing Arthur T?:
Arthur S. and his allies have argued in court documents that Arthur T. has mismanaged the company and ignored the authority of its board.
Well if that’s the case the nine shareholders who all happen to be members of the Demoulas family must be doing pretty bad and the 71 stores must be in horrible shape.
documents indicate that Arthur S.’s family has received roughly $500 million in dividends over the past decade
$500 million? That’s a hell of a chunk of change, but in fairness that’s over ten years, it’s easy to paint a pretty picture when you include the Bush years with the Obama years, how about right now in the worst economy that we have seen in our lifetimes?
In a recent interview, Arthur T. Demoulas said that Market Basket has performed well under his five-year tenure as chief executive, recording net income of $217 million in 2012 on $4 billion in revenue.
Do you mean to say that Arthur T as Chief Executive managed to produce a $217 million dollar profit last year? (over 5%). Can it actually be that during one of the roughest times in our nation Arthur T ran the company at a profit and managed to do so without massive debt? I’m impressed and apparently I’m not alone:
“First and foremost, if you see what the company has done in the last five or six years, it’s nothing short of remarkable,” said former state Sen. Steven Panagiotakos, whose two daughters work for Market Basket part-time when not in school.
“It’s hard to understand why they’d want to change leadership in the midst of all this success they’re seeing right now,” Panagiotakos added.
Well he must be using an iron hand to wring out these kind of profits I mean the employees must really be exploited…
While they were off the clock, Jake Barisano, 19, and Brent Gellerson, 18, rallied for Demoulas with posters, petitioning pages, and current articles on the family feud that has been stirring up recent headlines.
Since Saturday, Market Basket employees have been stationed outside the Somersworth store and as of Monday, 2,500 signatures had been gathered.
Market Basket staffers indicate they will be educating all who will listen until the decision is made this Thursday. Employees claim the removal of their current CEO will change their store, and its motto “more for your dollar.”
What? Well that’s just one store….
yesterday, employees outside Market Basket locations in Haverhill and Londonderry asked customers to sign a petition in support of Arthur T. Demoulas. A similar “Save Market Basket” petition boasts over 35,000 online signatures.
In fact I’ve seen the very same thing at the locations in Fitchburg that I’ve visited. Every employee I’ve talked to, NON UNION employes mind you, seem to be banding together to support their CEO.
This doesn’t seem to make sense, after all aren’t we constantly told that without unions employes are abused. Why would these people at all these locations be so wiling to go to bat for the rich owner? Why take sides in a family feud? Well in fairness there are millions of reasons:
The protesting shareholders have been especially outraged by a profit-sharing plan that they believe has enriched rank-and-file employees at the expense of the family. Indeed, Arthur T. Demoulas proudly declares that some employees retire with well over $1 million in their profit-sharing plans.
In one telling episode, one of the funds in which the profit-sharing money is invested suffered a $46 million quarterly loss during the 2008 financial meltdown. Arthur T. Demoulas says he insisted that the company immediately make up the loss to his employees’ accounts. That enraged his cousins, who maintained that no investment comes without risk.
That’s a big chuck of change that normally would have been split among the 9 shareholders and they have a point about the normal risks of investments but what did that blip in the bottom line buy the company?
“This company has 25,000 employees working very harmoniously, who are happy,” Arthur T. Demoulas said. “Our customers are happy. Our vendors are happy. Then you have three or four shareholders who are unhappy.”
It would seem to me that if you have a company that is running smoothly, that is making a solid profit and has a loyal customer base and a loyal employee base. It’s pretty foolish to punish success.
But this company is not mine, it belongs to the shareholders I may have an opinion on the matter but I don’t work there, my sons don’t work there and it’s been almost 30 years since my wife was a cashier there.
So why on earth did I Mr. Free market sign that petition to keep Arthur T on the board? My own self-interest.
How on earth is preventing a change in control of the company in my self interest? Well that’s a post for tomorrow.
Update: Fixed repeated paragraph
Update 2: Two notes to local readers, If you see a plump fellow in a Doctor Who Scarf and a hat, odds are it is me, additionally you can find me Saturday’s Noon till 2 EST on the Money Matters Radio network. WBNW, WPLM, WESO. Odds are we will discuss this subject (along with the return of Twinkies 1st hour)