DEFA14A: Harley-Davidson Director Resigns, Citing Concerns Over Leadership and Performance

Jared Dourdeville resigns from Harley-Davidson's board, expressing concerns about leadership, culture, and shareholder returns.

Summary

• Jared Dourdeville resigned from Harley-Davidson's board of directors on April 5, 2025, citing concerns about the company's leadership, culture, and shareholder returns.
• Dourdeville's resignation letter, sent to the board on April 1, 2025, demanded the immediate resignation of Chairman and CEO Jochen Zeitz, Lead Independent Director Tom Linebarger, and long-tenured Board member Sara Levinson.
• The company states that Dourdeville did not voice concerns over the Hardwire strategic plan during his tenure as a director, and that voluntary employee turnover was at its lowest recorded history in 2024.
• Harley-Davidson acknowledges Dourdeville's concerns but emphasizes that the board will continue to exercise independent judgment and comply with fiduciary duties.
• The company highlights that it has delivered a better total shareholder return than all but one of its peers in the motorcycle and powersports industries, despite a challenging market environment.

Sentiment

Score: 3

Explanation: The document presents a negative sentiment due to the resignation of a board member and concerns raised about leadership and performance. While the company attempts to counter these concerns, the overall tone is unfavorable.

Positives

• Voluntary employee turnover at the Company in 2024 was the lowest in the Company's recorded history, with 2023 being the second lowest.
• Employee engagement in 2024 was the highest since the survey was started in 2021.
• The Company has delivered a better total shareholder return than all but one of its peers in the motorcycle and powersports industries.

Negatives

• Jared Dourdeville resigned from the board due to concerns about leadership, culture, transparency, and accountability.
• Dourdeville expressed grave concerns about the current state of the Company and recommended specific actions, principally the immediate resignations of Chairman and CEO Jochen Zeitz, Lead Independent Director (Presiding Director) Tom Linebarger, and long-tenured Board member Sara Levinson.
• The shareholder returns of the Company under current leadership show severe underperformance.

Risks

• The resignation of a board member can create uncertainty and potentially disrupt company strategy.
• Concerns raised by the resigning director regarding leadership, culture, and accountability could negatively impact employee morale and investor confidence.
• Underperformance in shareholder returns could lead to further investor dissatisfaction and potential activist campaigns.

Future Outlook

The company is in the final year of the Hardwire, its five-year strategic plan (2021-2025) and continues its search for a new Chief Executive Officer.

Management Comments

• The Company has successfully executed the Hardwire, reinvigorating the brand during one of the most challenging operating environments in the history of the Company.
• While the Company has not been able to achieve its financial ambitions given the extremely challenging market environment, it has delivered a better total shareholder return than all but one of its peers in the motorcycle and powersports industries.
• In summary, as the Company continues its search for a new Chief Executive Officer and executes its other responsibilities, the Board will continue to engage with H Partners as a significant shareholder but each Director will continue to exercise their independent judgement and comply with their fiduciary duties in all matters on behalf of all shareholders.

Industry Context

The document mentions an unprecedented downturn in the motorcycle and powersports industries, impacting the company and its competitors. This suggests that Harley-Davidson's challenges are not unique and are partly attributable to broader industry trends.

Comparison to Industry Standards

• Harley-Davidson's total shareholder return under current leadership is -17%, compared to 86% for the S&P 500 and 21% for a self-reported peer group average during the same tenure.
• The document states that Harley-Davidson has delivered a better total shareholder return than all but one of its peers in the motorcycle and powersports industries, but does not name the peer group.

Management Changes

Stakeholder Impact

• Shareholders may be concerned about the leadership and performance issues raised by the resigning director.
• Employees may experience uncertainty due to the leadership changes and potential impact on company culture.
• The company's reputation and brand image could be affected by the negative publicity surrounding the resignation.

Next Steps

• The Company continues its search for a new Chief Executive Officer.
• The Board will continue to engage with H Partners as a significant shareholder.

Key Dates

Keywords

Harley-Davidson, board of directors, resignation, Jared Dourdeville, leadership, shareholder returns, governance, H Partners, CEO, Jochen Zeitz, Tom Linebarger