SCHEDULE 13D/A: Activist Investor H Partners Launches Proxy Fight at Harley-Davidson, Citing $1.8 Billion in Shareholder Value Destruction

Activist investor H Partners Management, holding a 9.1% stake in Harley-Davidson, has launched a 'withhold' campaign against CEO Jochen Zeitz and two other directors, alleging significant execution issues and $1.8 billion in shareholder value destruction.

Summary

• H Partners Management, LLC and Rehan Jaffer, collectively holding 9.1% of Harley-Davidson, Inc. common stock (11,300,000 shares), have initiated a 'withhold' campaign against three key directors.
• The campaign targets Jochen Zeitz (CEO and Chairman), Thomas Linebarger (Presiding Director), and Sara Levinson (a 29-year director) for election at the upcoming 2025 annual meeting of shareholders.
• The reporting persons filed a preliminary proxy statement and issued a press release and open letter on April 16, 2025, urging shareholders to vote 'WITHHOLD' on the targeted directors.
• H Partners alleges significant execution issues, a lack of transparency from the CEO and Presiding Director, and the Board's failure to hold management accountable for 'significant value destruction'.
• Since Jochen Zeitz's appointment as Chairman and CEO on February 28, 2020, Harley-Davidson has significantly underperformed the S&P 500 and the S&P 400 Consumer Discretionary Index, resulting in approximately $1.8 billion of shareholder value destruction.
• The campaign aims to compel the resignations of the targeted directors, immediately reconstitute the Board, and calls for the immediate removal of Mr. Zeitz as CEO, with an interim internal CEO appointed until a permanent external CEO is found.

Sentiment

Score: 2

Explanation: The document expresses strong negative sentiment from a significant shareholder regarding Harley-Davidson's current management and Board, citing significant underperformance, lack of transparency, and value destruction. The tone is critical and demands immediate changes.

Negatives

• Significant execution issues at Harley-Davidson.
• Lack of full transparency from the CEO (Jochen Zeitz) and Presiding Director (Thomas Linebarger) with the rest of the Board.
• Certain Board members are unable or unwilling to hold management accountable for significant value destruction and other issues.
• The Reporting Persons' Board representative had limited ability to influence the Board due to the outsized influence of Mr. Linebarger and Mr. Zeitz.
• Loss of faith in the Board's ability to oversee the Issuer and act in the best interests of shareholders.
• Harley-Davidson's significant underperformance compared to the S&P 500 and the S&P 400 Consumer Discretionary Index since February 28, 2020.
• Approximately $1.8 billion of shareholder value destruction attributed to the period since Mr. Zeitz's appointment as Chairman and CEO.

Risks

• Continued significant execution issues within the company.
• Further destruction of shareholder value due to perceived inadequate management and Board oversight.
• Lack of accountability for management's performance and strategic decisions.
• The Board's potential inability or unwillingness to act in the best interests of all shareholders.
• Potential for prolonged underperformance relative to broader market indices and industry peers.

Future Outlook

The reporting persons seek to compel the resignations of Jochen Zeitz, Thomas Linebarger, and Sara Levinson, and to immediately reconstitute the Board. They also demand the immediate removal of Mr. Zeitz as CEO and the appointment of an internal senior leader as interim CEO until an external, permanent CEO is selected.

Management Comments

• "There have been significant execution issues at the Issuer."
• "The CEO and Presiding Director have not been fully transparent with the rest of the Board."
• "Certain members of the Board have been unable or unwilling to hold management accountable for the significant value destruction and other issues plaguing the Issuer."
• "The Reporting Persons have lost faith in the Board's ability to oversee the Issuer and act with the best interests of shareholders in mind."
• "The Issuer's underperformance while Mr. Zeitz has served as the combined Chairman and CEO of the Issuer is hard to ignore."
• "Since February 28, 2020, the date of Mr. Zeitz's appointment as Chairman and CEO, the Issuer has significantly underperformed the S&P 500 and the S&P 400 Consumer Discretionary Index, corresponding to the destruction of approximately $1.8 billion of shareholder value."
• "The Reporting Persons have initiated a withhold campaign seeking to compel the resignations of Mr. Zeitz, Mr. Linebarger and Ms. Levinson, and to send a clear message to the Issuer that the Board must be reconstituted immediately."
• "The Reporting Persons also called on the Board to immediately remove Mr. Zeitz as CEO and appoint an internal senior leader as interim CEO until an external, permanent CEO is selected."

Industry Context

This filing represents a significant instance of shareholder activism within the consumer discretionary sector, specifically targeting a legacy brand like Harley-Davidson. It highlights growing investor scrutiny over corporate governance, executive accountability, and long-term strategic performance, particularly when companies underperform broader market indices. Such campaigns often reflect broader industry trends where investors demand more agile and responsive leadership in the face of evolving market dynamics and competitive pressures.

Comparison to Industry Standards

• Harley-Davidson has significantly underperformed the S&P 500 since February 28, 2020.
• Harley-Davidson has significantly underperformed the S&P 400 Consumer Discretionary Index since February 28, 2020.
• The underperformance corresponds to approximately $1.8 billion in shareholder value destruction, indicating a substantial negative deviation from market benchmarks.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if the activist campaign is successful in driving performance improvements and better governance; risk of continued value destruction if current issues persist.
• Management/Employees: Uncertainty and potential changes in leadership and strategic direction; potential for improved morale and performance if new leadership is effective.
• Board of Directors: Increased scrutiny and pressure to demonstrate accountability and responsiveness to shareholder concerns.
• Customers/Suppliers: Potential for changes in product strategy or operational focus depending on new leadership, which could impact relationships.

Next Steps

• Harley-Davidson's 2025 annual meeting of shareholders, where the 'withhold' votes will be solicited.
• The Board's response to the demand for immediate removal of Mr. Zeitz as CEO and appointment of an interim CEO.
• The process of selecting an external, permanent CEO if Mr. Zeitz is removed.
• Potential reconstitution of the Board.

Key Dates

Recommendation

Keywords

Harley-Davidson, H Partners Management, Shareholder Activism, Proxy Fight, Corporate Governance, CEO, Board of Directors, Shareholder Value, Underperformance, Jochen Zeitz, Thomas Linebarger, Sara Levinson, Motorcycle Industry, Consumer Discretionary