Harley-Davidson chairman chief executive officer Jochen Zeitz has entered into a new compensation agreement with the company that will reduce his base salary by $600,000 but also incentivizing him to stay in the job through the end of 2024 with stock options. Zeitz’s salary will be $1.9 million, down from $2.5 million, but he is also eligible for a $2.4 million annual bonus and a long-term equity incentive with a target value of $6 million according to a securities filing made Friday. He will also receive options to purchase up to 500,000 shares of Harley stock based on how long he stays in the CEO role and the performance of the company’s stock. If Zeitz leaves the CEO role before the end of 2023, he would not be able to exercise any of the options. If he stays through the end of 2024 and the stock price is above $65 per share, Zeitz would be able to exercise 100% of the options. The percentage he can exercise decreases based on share price and whether he were to leave in 2023 or 2024. Those lowest level is 13.2% based on a 2023 departure and a share price of $45. Anything below $45 and he won’t be able to exercise any of the options. The options were granted as of Dec. 1 when Harley’s shares were trading around $36.60 per share. In adjusting Zeitz’s pay, Harley’s board noted he had “done an effective job restructuring the company (The Rewire) and defining a new strategy (The Hardwire) and he has positioned the company very well for the future.” The board also pointed to shareholder feedback that included a desire for a reduction in base pay, more emphasis on variable cash compensation and a long-term performance component. Harley’s board and its human resources committee “believe it is imperative that Mr. Zeitz remain as chief executive officer to provide continuity to Harley-Davidson as the company continues to implement The Hardwire, its 5-year strategic plan that was announced in February 2021,” the filing says. Zeitz took over as CEO in March 2020 on an acting basis initially and then in an official capacity in May 2020. His total compensation for that year, which included a pay cut amid the early days of the COVID-19 pandemic, was $9.3 million. Matt Levatich, the previous CEO, had a base salary of almost $1.08 million in 2019, his last full year in the job. His total compensation that year was more than $11.1 million.
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