DEFA14A: ISS Backs Harley-Davidson's Director Nominees, Dismisses H Partners' Call for Change

Institutional Shareholder Services (ISS) recommends Harley-Davidson shareholders vote for all of the company's director nominees, dismissing H Partners' campaign for board representation.

Summary

• Harley-Davidson announced that ISS, a leading independent proxy advisory firm, recommends shareholders vote FOR ALL of Harley-Davidson's director nominees at the upcoming 2025 Annual Meeting of Shareholders.
• ISS concluded that H Partners has not presented a compelling case for change and supports Harley-Davidson's nominees.
• ISS noted that the strategy introduced by CEO Jochen Zeitz has positively impacted Harley-Davidson, which was in decline when he took over.
• The advisory firm also stated that Harley-Davidson has kept pace with peers under Zeitz's leadership and the Hardwire strategy.
• ISS believes the board initiated the CEO search process promptly and took the correct procedural steps.
• ISS also suggests that H Partners' campaign has likely set the CEO search process back.
• The board of directors urges shareholders to vote FOR ALL of the company's nominees on the WHITE proxy card.
• Harley-Davidson has filed its definitive proxy statement with the SEC.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the support from ISS and the recognition of the positive impact of the Hardwire strategy. However, the ongoing proxy fight and CEO search process introduce some uncertainty.

Positives

• ISS's recommendation supports Harley-Davidson's current board and governance structure.
• The Hardwire strategic plan is acknowledged as positively impacting the company.
• CEO Jochen Zeitz's leadership is credited with stabilizing and refocusing the business.
• Harley-Davidson has kept pace with peers after dramatically underperforming for several years.

Negatives

• H Partners' campaign is viewed as disruptive to the CEO search process.
• The campaign is seen as a reaction to the board's decision not to select H Partners' preferred candidate.

Risks

• The document mentions risks and uncertainties regarding the company's ability to execute its business plans and strategies, including the Hardwire strategic plan.
• There are risks associated with managing supply chain and logistics issues.
• The company faces risks related to changing market conditions, interest rates, and geopolitical environments.
• Uncertainties exist regarding actions that have been taken and may in the future be taken by H Partners in furtherance of its campaign relating to the Company's Annual Meeting of shareholders and potential costs and management distraction attendant thereto.
• Risks are present related to Harley-Davidson Financial Services (HDFS), including uncertainties regarding a potential third party investment in HDFS.

Future Outlook

The press release contains forward-looking statements regarding future results of operations, financial position, and performance, including expectations related to earnings capacity, shareholder value, and the Hardwire strategic plan.

Management Comments

• Tom Linebarger, Presiding Director of the Board, stated that ISS recognizes the strength of the Board and governance structure.
• Linebarger believes ISS's recommendation highlights the flaws in H Partners' actions and the disruption their campaign is bringing to the Board's ongoing efforts.
• The company remains committed to acting in the best interests of all shareholders.

Industry Context

This announcement reflects the ongoing engagement between companies and their shareholders, particularly activist investors, regarding corporate governance and strategic direction. Proxy advisory firms like ISS play a crucial role in influencing shareholder votes and shaping corporate decisions.

Comparison to Industry Standards

• ISS's recommendations are widely followed by institutional investors, making their support significant for Harley-Davidson.
• The proxy fight with H Partners is similar to other activist campaigns where investors seek board representation to influence company strategy.
• The focus on CEO succession is a common theme in corporate governance, with boards often facing scrutiny over their search processes.

Stakeholder Impact

• Shareholders are urged to vote in favor of the company's nominees to protect their investment.
• The outcome of the proxy vote will impact the composition of the board and the direction of the company.
• The CEO search process affects the leadership and future strategy of Harley-Davidson.

Next Steps

• Harley-Davidson shareholders will vote on the director nominees at the Annual Meeting on May 14, 2025.
• The board will continue its CEO search process.

Key Dates

Keywords

Harley-Davidson, ISS, H Partners, Director Nominees, Proxy, Shareholders, CEO Search, Hardwire Strategic Plan, Board of Directors, Governance