New York-based H Partners Management, an independent investment firm, launched an activist campaign against Harley-Davidson leadership Wednesday.
The campaign is aimed at getting Harley shareholders to withhold the re-election of three Harley board members: CEO Jochen Zeitz, board member Sara Levinson, and board member Tom Linebarger. It follows the sudden resignation of Harley board member Jared Dourdeville earlier this month. Dourdeville is a partner at H Partners.
H Partners, which owns a 9.1% stake in Harley, is also calling on the board to immediately remove Zeitz as CEO and install a senior leader to the position temporarily.
Zeitz plans to retire at the end of the year, and three candidates have been formally interviewed for his position.
“We believe it defies logic for Mr. Zeitz, an outgoing CEO with a poor track record at the company, to make any key decisions that impact the company’s future,” wrote H Partners in a Wednesday announcement. “Based on discussions with external parties and a review of social media, we believe that Mr. Zeitz spends far more time in New Mexico, the United Kingdom, and rural Kenya than at the company’s headquarters in Milwaukee, its manufacturing plants, or its dealerships. We believe that absentee leadership does not serve the company, especially at this critical moment.”
H Partners claims it first engaged Harley’s board in 2021 regarding concerns around executive compensation, corporate governance, and board compensation. This led to Dourdeville joining Harley’s board in February 2022. The firm was also behind a pay incentive plan offered to Zeitz in 2022 that would have given him tens of millions in stock if he could return the company to and beyond its all-time peak value and performance.
“Over the last year, it has become increasingly apparent to us that there have been major execution issues, overseen by an absentee CEO; that the CEO and presiding director have not been fully transparent with the rest of the board; and that certain long-tenured board members have been unwilling to hold the CEO accountable for severe value destruction and the cultural depletion of this iconic American company,” wrote H Partners.
The firm further echoed its belief that Harley-Davidson’s underperformance as a company is “undebatable” and that Harley has “failed to achieve nearly every objective outlined in its long-term Hardwire Strategic Plan.”
H Partners also launched a website for its Free the Eagle campaign on Wednesday. Representatives with the firm declined further interview requests.
“We are 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,” said a Harley spokesperson Wednesday. “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 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.”
Read more articles about Harley-Davidson:
- Split vote on CEO candidate played role in Harley-Davidson board member’s resignation
- Harley-Davidson board member resigns citing ‘severe underperformance’ and ‘cultural depletion’ of brand
- Harley-Davidson searching for its next CEO with Jochen Zeitz planning to retire
- $365 million drop in Q4 leaves Harley sales down 11% for the year
- Harley revises some policies following DEI backlash on social media
- Harley-Davidson responds to online criticism of company’s policies and trainings
- Harley sees ‘customers sitting on the sidelines’ amid higher interest rates, uncertainty
- Harley CEO issues statement about company’s commitment to remote work, Milwaukee
