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A significant shareholder in Harley-Davidson is demanding major changes to the company’s board, insisting that CEO Jochen Zeitz and two other longstanding members should be replaced.
H Partners Management announced on Wednesday that it is urging other Harley-Davidson shareholders to issue “withhold” votes at the upcoming shareholder meeting in May, where the re-election of Zeitz and two board members, Thomas Linebarger and Sara Levinson, is slated for a vote.
The firm holds approximately 9.1% of the motorcycle company’s shares. Jared Doureville, one of its principals, served on Harley-Davidson’s board from February 2022 until recently when he resigned.
The Harley Davidson Motorcycles corporate logo is featured at their store in Disney Springs at Walt Disney World on June 1, 2024, in Orlando, Florida. (Photo by Gary Hershorn/Getty Images / Getty Images)
Voting “withhold” would send a “strong message to the Board that shareholders are unhappy with the current situation and that significant changes are needed,” the investment firm stated in a filing with the Securities and Exchange Commission (SEC).
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In a publicly available letter, H Partners urged the Harley-Davidson board to “immediately replace” Zeitz with an interim CEO “until a permanent external CEO can be appointed.”
“An absentee CEO announcing his plans to retire should not be making decisions that affect the company’s long-term future,” the investment firm emphasized. “Furthermore, the current Board, which is heavily dominated by a few long-standing members, is not trustworthy when it comes to overseeing critical decisions, including those regarding CEO succession.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| HOG | HARLEY-DAVIDSON INC. | 22.27 | +0.66 | +3.03% |
Earlier this month, Harley-Davidson announced that it was in the process of finding a new CEO to succeed Zeitz, who indicated to the board late last year that he intended to retire.
H Partners claimed that the motorcycle company has suffered from “poor performance” due to an “inability to adjust course,” which it partially attributed to Zeitz and Linebarger.
A close-up view of a Harley-Davidson motorcycle captured on Whyte Avenue in Edmonton, Alberta, Canada, on Sept. 10, 2023. (Artur Widak/NurPhoto via Getty Images / Getty Images)
It further alleged that both Zeitz and Linebarger had not maintained transparency with the rest of the Board. Zeitz, Linebarger, and Levinson are described as “entrenched” and “unable to hold one another accountable for subpar performance.”
In its SEC filing, H Partners expressed “deep concern that if the Board remains as is, it will choose the new permanent CEO and continue the current strategic path, ultimately leading to further degradation of shareholder value.”
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As of Wednesday, shares of Harley-Davidson have decreased by over 24% since the beginning of the year. In the past year, shares have fallen by 42.7%.
“It is crucial to appoint a leader who will mend relationships with dealers, connect with riders, honor and enhance the brand, improve corporate culture, restore the historic Milwaukee headquarters presence, and bring Harley-Davidson back to its former glory,” H Partners stated in their letter to shareholders.
FOX Business has reached out to Harley-Davidson for response.
Earlier in February, the company reported a revenue of $4.12 billion in 2024, marking a 14.9% decline from the previous year. Its annual net income also dropped to $455.36 million.
The Harley-Davidson logo is visible near a store in Krakow, Poland, on Jan. 24, 2024. (Jakub Porzycki/NurPhoto via Getty Images / Getty Images)
During that time, Zeitz noted that Harley-Davidson “saw our performance being greatly affected by the ongoing cyclical challenges for discretionary items, especially the high-interest rate environment impacting consumer confidence” in 2024.
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The company’s outlook for 2025 projects revenue to be “flat, or down by 5%.”
