A major shareholder in Harley-Davidson is calling for significant changes to the company’s board, arguing CEO Jochen Zeitz and two other longtime members should be removed.
H Partners Management on Wednesday said it was asking other Harley-Davidson shareholders to cast “withhold” votes at the upcoming shareholder meeting in May when the re-election of Zeitz and two other board members, Thomas Linebarger and Sara Levinson, goes up for a vote.
The firm’s stake in the motorcycle company amounts to approximately 9.1%. One of its principals, Jared Doureville, was on Harley-Davidson’s board from February 2022 until earlier this month, when he resigned.
Shareholders voting to “withhold” would be “sending a strong message to the Board that they are dissatisfied with the status quo and that meaningful change is required,” the investment firm said in a filing with the Securities and Exchange Commission (SEC).
In a publicly-available letter, H Partners advocated for Harley-Davidson’s board to “immediately remove” and replace Zeitz with an interim CEO “until an external, permanent CEO is selected.”
“We believe an absentee CEO who has already announced his intention to retire should not be making decisions that could affect the long-term prospects of the business,” the investment firm said. “We also believe that the current Board, which is tightly controlled by a small number of entrenched Board members, cannot be trusted to oversee crucial decisions, including CEO succession.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| HOG | HARLEY-DAVIDSON INC. | 21.85 | +0.24 | +1.11% |
Earlier this month, Harley-Davidson revealed it was in the midst of the process of finding a new CEO to take over for Zeitz, who informed the board in the final quarter of last year that he wanted to retire.
H Partners says the motorcycle company experienced “poor performance” because of an “inability to course-correct” that it partly blamed on Zeitz and Linebarger.
It alleged the two “have not been fully transparent with the rest of the Board.” Zeitz, Linebarger and Levinson are “entrenched” and are “unable to hold each other accountable for poor performance,” it further claimed.
H Partners said in its SEC filing that it was “deeply concerned that if the Board — as currently constituted — were to select the new permanent CEO, there will be a continuation of the Company’s current strategic direction and further destruction of significant shareholder value.”
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As of Wednesday, shares of Harley-Davidson have fallen over 24% since the start of the year. Over the past 12 months, they have posted a 42.7% decline.
“We believe it is imperative to find a leader who will repair the relationship with dealers, engage with riders, respect and strengthen the brand, improve the corporate culture, restore the physical presence of the Company at its historic Milwaukee headquarters, and return Harley-Davidson to greatness,” H Partners said in its letter to shareholders.
A Harley-Davidson spokesperson said in a statement to FOX Business that it was “disappointed that H Partners has chosen to take this self-serving action targeting members of our board after that firm’s preferred CEO candidate failed to receive majority support from the Board’s Independent Directors.”
“H Partners has chosen to put its own interest ahead of the interests of other shareholders by attempting to disrupt the Board’s rigorous and thoughtful CEO transition process, creating uncertainty for and putting Harley-Davidson’s future and shareholder value at risk,” the spokesperson continued. “The Board is committed to acting in the interests of all of Harley-Davidson’s shareholders by continuing to strengthen the Company’s foundation for the future and selecting the right CEO to lead Harley-Davidson into its next chapter.”
In early February, the company said it generated $4.12 billion in revenue in 2024, a 14.9% decline year-over-year. Its annual net income, meanwhile, fell to $455.36 million.
Zeitz said at the time that Harley-Davidson “saw our performance being significantly impacted by the continued cyclical headwinds for discretionary products, including the high-interest rate environment affecting consumer confidence” in 2024.
The company’s forecast for 2025 said its revenue would be “flat, to down 5%.”
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