May 14th is a rather nondescript day, ain't it? It definitely isn't May 4th—yes, I'm a Star Wars nerd—nor the party that revolves around May 5th. Yet, despite its beige outward appearance, it's set to be a barn-burner, as the contentiousness over Harley-Davidson's board is set to come to a head.
The date above is the one set for Harley-Davidson's next shareholders meeting, and based on what's been going on over the past few weeks, it'll be an interesting one as the board is set to vote on whether they kick out the brand's current CEO, as well as two long-standing board members.
This messiness all began when current CEO Jochen Zeitz announced that he'd be retiring at the end of the year. His tenure wasn't exactly what was promised when he was promoted to the position from the company's board five years ago, and Harley's faced numerous external and internal challenges during his reign as leader of the Motor Co.
Harley quickly began a search for the next CEO shortly after Zeitz informed the board of his decision, and numerous candidates were immediately vetted. But ultimately, no person was selected. This non-decision, however, angered one board member, Jared Dourdeville of H Partners Management, as he was upset his preferred candidate didn't get the nod. As such, he resigned his position and began a proxy fight with the board.
After vacating his seat, Dourdeville made his grievances known in both an SEC filing, as well as public statements about how he viewed Harley-Davidson's mismanagement. But Harley was quick to point out that Dourdeville voted with the board and its directors in every instance while he was in his position, never once straying from the vision set forth by the company.
H Partners Management then sought to not only see Zeitz removed from his position effective immediately, but also two long-standing board members, Tom Linebarger and Sara Levinson. Likewise, they sought out further like-minded investors, finding Purple Chip Capital as an ally in its fight. While H Partners Management has about a 9% stake in the Milwaukee manufacturer, Purple Chip Capital only has a 1% stake. Like Dourdeville, Purple Chip Capital laid out a list of grievances, along with misspelling Harley-Davidson in every instance of its public statement.
Both parties also claimed that the board had mismanaged the brand and lost the core Harley audience.
And in recent weeks, both H Partners and Purple Chip found another ally in the National Powersports Dealer Association's Harley-Davidson Council, representing 170 dealers out of the total 650 dealers in the United States. They list a host of grievances, including "The National Powersports Dealer Association (NPDA), Harley-Davidson Council (H-D Council) shares many of the concerns presented by H Partners regarding the destruction of culture and poor dealer relations, and we have communicated these concerns to current leadership over the past four years. To date, no meaningful changes have occurred that would strengthen the brand and the future of the dealer network."
They added, "Harley-Davidson dealers throughout the United States are in support of H Partners’ positions and support the removal of CEO and Chairman Jochen Zeitz, Presiding Director Tom Linebarger and 29-year director Sara Levinson."
They found further allies in Glass Lewis and Egan-Jones, two other proxy firms, who stated it would back H Partners Management's "Withhold" and "No" votes.
Countering this, Institutional Shareholder Services Inc. (ISS), a corporate governance proxy firm, "recommended that shareholders vote "FOR ALL" of Harley-Davidson's highly qualified Director nominees in connection with the Company's 2025 Annual Meeting of Shareholders scheduled to be held on May 14, 2025." Furthermore, they found that H Partners Management had "not presented a compelling case for change, and as such, support is warranted "FOR ALL" Harley-Davidson's nominees."
They then went line by line, picking apart H Partners Management, Purple Chip Capital, and the Dealer Association's cited issues, adding the following points.
- "The bigger picture is that the strategy introduced by Zeitz has had a positive impact on the trajectory of HOG, which had lost considerable ground when he took over as interim CEO."
- "The HOG Zeitz inherited was in decline. He attempted to stabilize the business, simplify operations, and refocus on the core. Even the dissident recognizes the logic of this strategy."
- "HOG has kept pace with peers. This is significant, as HOG dramatically underperformed peers for several years prior to introduction of the Hardwire strategy."
Likewise, the proxy firm found that this campaign would actually hinder finding a new CEO, rather than help it, stating, "The facts suggest that when the dissident's preferred candidate was not selected, the dissident reacted by vacating the board and launching this vote no campaign in an attempt to establish a path to its desired outcome in the CEO search. [D]espite the dissident's argument that there is a sense of urgency, the distraction of this campaign has almost certainly set the [CEO search] process back. This only reinforces the board's conclusion that this campaign is a reaction, rather than a measured response."
I've already spoken at length about this whole process, and I find I agree more with Harley than I do with those seeking to upend its board. I do share some of those countering beliefs, however, as while I believe dealerships to be the wretched hive of villainy and scum they are, I think for a company to be successful, that needs to be a partnership. You have to have good dealerships, that aren't crooks and thieves, to represent your brand.
Likewise, LiveWire's strategy has failed and needs rethinking.
But the fact that this all came to a head because one director didn't get his way by picking the new CEO and threw want amounts to a tantrum is ridiculous to say the least. That's not good corporate governance of one of the most important American brands around. That's acting like my children when I say we're done with our tablets and it's time for dinner.
And I do agree that Harley-Davidson is at a crossroads, as its current demographics, the folks it has marketed to for the last three decades, just isn't there anymore. It can't just be for older white dude wannabe Hells Angel dentists from the Midwest. It has to evolve. It has to figure out a strategy to garner new riders.
A shakeup, however, is set to occur next week. Whether it's a revived board by way of Harley's preferred candidates or that of H Partners Management, however, is yet to be seen. But expect some fireworks, as they're absolutely set to go off on May 14th.
