DEFA14A: Harley-Davidson Addresses Shareholder Concerns on Executive Pay, Recommends 'For' Vote on Director Nominees and Executive Compensation

Harley-Davidson is providing supplemental information to its proxy statement, addressing shareholder feedback on executive compensation and reiterating its recommendation for shareholders to vote in favor of director nominees and executive compensation.

Summary

• Harley-Davidson is providing supplemental information regarding the Compensation Discussion and Analysis in its proxy statement for the 2024 Annual Meeting of Shareholders.
• The company is addressing shareholder feedback on its executive compensation program, particularly concerning the 2022 Aspirational Incentive Plan (AIP).
• The Human Resources Committee (HRC) has stated that there are no plans to repeat the AIP or similar programs and will only consider one-time compensation actions in exceptional circumstances.
• The HRC engaged with shareholders representing approximately 45% of outstanding shares during the spring engagement and 32% during the fall outreach to obtain feedback on executive compensation and governance issues.
• In 2023, a supplemental STIP component of $1,500,000 was awarded to Mr. Zeitz for his leadership in standing up LiveWire as a separate company and appointing Karim Donnez as LiveWire CEO.
• Harley-Davidson's Board has a history of diversity, with at least 22% of the Board being gender diverse since 2016 and racially/ethnically diverse since 2017.
• The company recommends shareholders vote FOR the election of director nominees and FOR approval of the compensation of Harley-Davidson's named executive officers (NEOs).

Sentiment

Score: 7

Explanation: The document conveys a positive sentiment by addressing shareholder concerns and highlighting the company's commitment to good governance and diversity. However, it also acknowledges past issues with executive compensation, which tempers the overall sentiment.

Positives

• Harley-Davidson is actively engaging with shareholders to address concerns about executive compensation.
• The company is committed to diversity on its Board of Directors.
• The HRC is responsive to shareholder feedback and has made changes to address concerns about the AIP.
• The company's strategic plan, 'The Hardwire', is designed to enhance its position as the most desirable motorcycle brand in the world.

Future Outlook

The company expects its commitment to diversity will continue to be reflected in the composition of its Board and reiterates its ongoing commitment to engaging regularly with shareholders.

Management Comments

• The HRC has reiterated that there are currently no plans to repeat the AIP, or any similar programs, and further clarified that it will only consider additional one-time compensation actions in the future in exceptional circumstances.
• The HRC believes this change, in addition to other 2024 actions disclosed in our proxy statement, directly addresses and incorporates shareholder feedback received in our discussions and through prior Say on Pay votes.

Industry Context

The document reflects a growing trend of companies being more transparent and responsive to shareholder concerns regarding executive compensation and corporate governance. Companies are increasingly engaging with shareholders to understand their perspectives and make adjustments to their compensation programs accordingly.

Comparison to Industry Standards

• Many companies in the S&P 500 are facing increased scrutiny regarding executive compensation, with shareholders demanding a stronger link between pay and performance.
• Harley-Davidson's engagement with shareholders and adjustments to its compensation program are in line with best practices in corporate governance.
• The company's commitment to diversity on its Board is also consistent with industry trends, as investors increasingly prioritize diversity and inclusion.

Management Changes

Stakeholder Impact

• Shareholders: The document aims to address shareholder concerns regarding executive compensation and ensure alignment with company performance.
• Employees: The document highlights the company's commitment to diversity and inclusion, which can positively impact employee morale and engagement.
• Executive Officers: The document discusses the compensation of named executive officers and the rationale behind the decisions made by the HRC.

Next Steps

• Shareholders will vote on the election of director nominees and the approval of executive compensation at the 2024 Annual Meeting of Shareholders on May 16, 2024.

Key Dates

Keywords

executive compensation, shareholder engagement, LiveWire, diversity, Board of Directors, proxy statement, Harley-Davidson