Harley-Davidson clashes with shareholders in high-stakes boardroom fight

Harley-Davidson is in the midst of a heated proxy battle with activist investor H Partners ahead of its May 14 annual shareholder meeting. The conflict centers on board control and the succession process for outgoing CEO Jochen Zeitz, with both sides vying for shareholder support.

H Partners, a long-time investor with a previously friendly stance, has launched a “withhold-the-vote” campaign targeting three Harley board members, including Zeitz himself. The firm argues that the board is not aligned with shareholder interests and has mishandled the CEO succession process after their preferred candidate failed to gain majority support from the board.

However, Harley-Davidson strongly disputes these claims and is urging shareholders to vote “FOR ALL” of its director nominees using the WHITE proxy card. The company has received backing from influential proxy advisor Institutional Shareholder Services (ISS), which recommended support for Harley’s full slate of directors.

In its report, ISS cited the board’s recent performance and governance practices, writing, “The company has demonstrated operational improvements and outperformance relative to peers under the leadership of the current board and management. Replacing key directors, including the outgoing CEO during a pivotal leadership transition, would introduce undue risk.”

ISS also emphasized the importance of continuity during the CEO transition, noting, “Given the timing and context, removal of these directors could undermine the board’s ability to manage the CEO succession process successfully.”

Conversely, Glass Lewis and Egan-Jones have recommended that shareholders support H Partners’ withhold campaign, although Glass Lewis has acknowledged the potential disruption it may cause.

“We understand support for H Partners’ withhold campaign introduces incremental uncertainty at a key transitional juncture for Harley,” Glass Lewis writes, while also observing that the activist effort appears “absent of any substantive alternative course of action.”

Harley’s board members and executives have pushed back forcefully. “In our view, Glass Lewis and Egan-Jones fail to recognize the Board’s strong oversight of the Company’s ambitious Hardwire strategic plan and its sound corporate governance,” says Tom Linebarger, presiding director of the board. “Removing directors with the institutional knowledge critical to selecting the next CEO would introduce significant risk to the Company and jeopardize shareholder value.”

Linebarger also challenged H Partners’ motives, pointing out the firm had supported the current leadership and strategy until recently. “They had every opportunity to address their concerns during their three years on the board, but chose not to. Their abrupt change of course appears to be an attempt to engineer an outcome in the CEO search process that suits their own interests.”

CEO Jochen Zeitz, who announced plans to retire in 2025, stressed the importance of preserving momentum during the leadership transition. “I’m here to finish what I started — ensuring the next leader of this great Company is best positioned to drive value for our stakeholders,” Zeitz said. “We have made great progress transforming the business, and I want Harley-Davidson to keep riding strong into its next century.”

Under Zeitz’s leadership, Harley-Davidson says it has delivered total shareholder returns approximately 10 percentage points above its peer median and achieved operating margins four percentage points higher than industry averages between 2022 and 2024.

H Partners, however, claims the board is obstructing progress and acting in self-interest. In a statement, the firm said Harley’s current leadership is “failing to deliver the governance accountability shareholders deserve.”

Still, Harley argues the activist’s campaign is short on solutions and long on disruption. “H Partners has offered no new ideas and does not have your best interests at heart,” the company says in its letter to shareholders. “Their campaign jeopardizes the strategic progress made to date and undermines the Board’s ability to attract the best CEO and Director candidates.”

As the proxy fight intensifies, both sides seek to sway undecided shareholders in the days ahead of the May 14 vote. NPDA’s H-D Council also recently came out in support of H Partners. The result may determine not only the composition of Harley-Davidson’s board but also the future direction of one of America’s most legendary brands.

More information is available at www.VoteHarleyDavidson.com.