DEF: Harley-Davidson Seeks Shareholder Approval for 2025 Director Stock Plan and Executive Compensation

Harley-Davidson is asking shareholders to vote on the election of directors, executive compensation, ratification of the accounting firm, and approval of the 2025 Director Stock Plan at the upcoming annual meeting.

Summary

• Harley-Davidson is holding its 2025 Annual Meeting of Shareholders virtually on May 14, 2025.
• Shareholders will vote on four key items: electing ten directors, approving executive compensation, ratifying the selection of Ernst & Young LLP as the independent accounting firm, and approving the 2025 Director Stock Plan.
• The Board of Directors recommends voting FOR all director nominees and FOR items 2, 3, and 4.
• The 2025 Director Stock Plan seeks approval for an additional 350,000 shares for issuance.
• The company highlights its commitment to inclusive stakeholder management, focusing on environmental, social, and governance (ESG) factors.
• The company's executive compensation program emphasizes pay-for-performance, aligning executive interests with those of shareholders.
• The company's executive compensation program is designed such that compensation outcomes in years of strong performance should trend above target, while outcomes trend downward in years where performance is below expectations.
• The company's combined HDMC and HDFS operating income of $526 million was below our threshold performance level.
• Retail sales growth was also below our threshold performance level.
• Therefore, the company did not make any STIP payment for our NEOs for 2024.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While it highlights strategic progress and commitment to shareholder value, it also acknowledges financial underperformance and external challenges. The emphasis on governance and stakeholder management adds a positive dimension.

Positives

• The company emphasizes its commitment to inclusive stakeholder management, focusing on environmental, social, and governance (ESG) factors.
• The company's executive compensation program emphasizes pay-for-performance, aligning executive interests with those of shareholders through equity-based awards and stock ownership guidelines.
• The company's executive compensation program is designed such that compensation outcomes in years of strong performance should trend above target, while outcomes trend downward in years where performance is below expectations.
• The company has a clawback policy in place for incentive-based compensation.
• The company prohibits hedging and pledging of company securities by directors, officers, and employees.

Negatives

• The company's combined HDMC and HDFS operating income of $526 million was below our threshold performance level.
• Retail sales growth was also below our threshold performance level.
• Therefore, the company did not make any STIP payment for our NEOs for 2024.

Risks

• The document includes a cautionary note regarding forward-looking statements, highlighting various risks and uncertainties that could affect future results.
• These risks include supply chain issues, tariffs, changing market conditions, and the company's ability to execute its business plans and strategies.

Future Outlook

The company aims for profitable growth and increased shareholder value through its Hardwire strategic plan, focusing on expanding the desirability of Harley-Davidson.

Management Comments

• The launch of our new 2024 Street Glide and Road Glide Touring motorcycles contributed to nearly +5% growth in the U.S. Touring product segment, and drove Harley-Davidsons market share of this segment to almost 75%, an increase of 3.5 percentage points since 2023.
• The decisions we have made as part of our Hardwire strategy allowed us to reestablish our profitability while giving us confidence we have the right product pipeline for years to come.
• We believe the decisions we made and the bold actions we have taken, as part of our Hardwire strategy, are continuing to strengthen our foundation for the future.
• You can count on Harley-Davidson to endure, to innovate, to adapt, and to lead.
• Harley-Davidson will be here, as the beating heart of the American dream, proudly making the best motorcycles in the world, no matter what.

Industry Context

The document mentions cyclical headwinds for discretionary products and the impact of high-interest rates on consumer confidence, reflecting broader economic challenges faced by the premium goods sector.

Comparison to Industry Standards

• The document benchmarks executive compensation against a peer group of companies including Brown-Forman Corporation, Molson Coors Beverage Company, RH, The Goodyear Tire & Rubber Company, BRP Inc., Lululemon Athletica, Tapestry, Inc., The Toro Company, Brunswick Corporation, Polaris Inc., Tempur Sealy International, Inc., Thor Industries, Inc., MillerKnoll, Inc., PVH Corp., Textron Inc., and Winnebago Industries, Inc.
• The document compares Harley-Davidson's three-year relative total shareholder return to that of five other publicly-traded companies in the consumer discretionary transportation space: BRP Inc., Brunswick Corporation, Polaris Inc, Thor Industries, Inc., and Winnebago Industries, Inc.

Corporate Governance

Stakeholder Impact

• The document discusses the impact of the company's sustainability policies, practices, and strategies on employees, customers, dealers, suppliers, the environment, and the communities in which the company operates.
• The company's performance and strategic decisions directly impact shareholders, employees, customers, and other stakeholders.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the Proxy Statement.
• The company will hold its 2025 Annual Meeting of Shareholders on May 14, 2025.

Key Dates

Keywords

executive compensation, director stock plan, annual meeting, corporate governance, shareholder vote, proxy statement, Harley-Davidson