A Boardroom Drama At Harley-Davidson
Second-largest shareholder seeks to fire CEO, overhaul board.
Harley-Davidson headquarters and Davidson Park. Photo by Jeramey Jannene.
The second-largest Harley-Davidson shareholder is moving to shake up the company and hasten the departure of CEO Jochen Zeitz.
H Partners, which owns approximately 9.1% of the motorcycle company’s stock, dramatically escalated its fight Wednesday morning when it issued an open letter to shareholders. The move follows the resignation of H Street principal Jared Dourdeville on April 5.
The hedge fund is seeking to remove Zeitz, the chairman and CEO, and two other long-time board members, Tom Linebarger and Sara Levinson, as part of a “withhold” campaign. The company had already announced Zeitz intends to retire sometime this year, after Dourdeville privately called for his resignation. H Partners is now calling Zeitz an “absentee CEO” and demanding his immediate removal so that he cannot influence who his replacement is.
Central to H Partner’s claim is Harley-Davidson stock price. It has underperformed the S&P 500 by 104% since Zeitz became CEO in February 2020.
“While I am concerned about this severe underperformance, what I am most concerned about are the foundational building blocks that underpin any company’s long-term trajectory: culture, transparency and accountability, and the willingness of the Board and management to put the Company first,” said Dourdeville in his April 5 resignation letter. The H Street principal was added to the board in 2022 as part of a cooperation agreement after H Partners targeted the company’s executive and board compensation and corporate governance, demanding changes.
In his resignation letter, which was heavily-redacated, Dourdeville said he wasn’t aware of the “extent of this white-collar-work-from-home policy,” the result of which has left the company’s historic headquarters mostly vacant and much of the employee parking lot turned into the $20 million Davidson Park. In his letter, he took issue with the “lack of accountability and transparency,” declining sales and the perceived failure of Zeitz’s Hardwire strategy. “At its highest levels, Harley-Davidson lacks a winning culture.”
Dourdeville also took issue with the amount of corporate turnover, something he’s now trying to incite from outside.
“We believe the Company’s poor performance is also due to an inability to course-correct, in part because the CEO and Presiding Director have seemingly prevented the appropriate flow of information to the Board, and because the Board has been unwilling to hold the CEO accountable for his failures. We believe that this is because Harley-Davidson’s current Board contains an entrenched core of directors, represented by the nearly two-decade overlap of Mr. Zeitz, Mr. Linebarger and Ms. Levinson,” says the letter. Zeitz has served on the board for 18 years, Linebarger for 17 and Levinson for 29 years.
Harley Davidson responded with a statement taking shots at H Partners: “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. 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 statement declared. “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.”
Zeitz was paid $9.14 million in 2024 and $12 million in 2023; both years included a $1.95 million base salary and substantial stock-based compensation. His 2023 compensation was 157 times that of the average worker at Harley. Zeitz was paid $43.3 million in 2022, a state-leading figure that was attributed to a $32 million stock bonus that requires the company to hit target figures in future years.
The company reported earnings of $278 million in 2024, a 6% increase, on the sale of 148,862 motorcycles, a 17% decrease. LiveWire, its electric motorcycle spinoff, reported a loss of $93.9 million in 2024, down from $109.6 million in 2023. It expects to sell 1,000 to 1,500 electric motorcycles in 2025.
Vanguard Group, an investment management company, is the largest Harley-Davdison shareholder with 10.2% of its shares outstanding. There are currently nine board members.
In 2015, H Partners successfully led a similar campaign to oust the CEO and shake up the board of mattress firm Tempur Sealy International.
The Harley-Davidson annual meeting is scheduled for May 14.
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This entire ouster of this current CEO is an attack on DEI / pride etc culture that he’s been fostering for years there, including that park built in their previous parking lot.
That heavily redacted SEC document is unbelievably telling too. That Robby Starbuck section is 100% some “anti-woke” tirade no doubt.
Harley Davidson isn’t great, sure, but it’s gonna be way worse once the remaining good folks are booted out by this bootlickin hedgefund chuds.