Major hedge fund prepares for fight at Harley-Davidson
Summary
The investment firm H Partners resigned from Harley’s board earlier this month in preparation for a fight.
A major Harley-Davidson shareholder is preparing to launch a fight to shake up the motorcycle maker’s board and quickly replace its chief executive in the face of deteriorating sales, according to people familiar with the matter.
The investment firm H Partners, which has a roughly 9% stake in Harley-Davidson, is preparing to urge shareholders to remove three longstanding directors from Harley’s eight-member board at the annual meeting in mid-May, the people said.
H Partners is also calling for Jochen Zeitz to step down immediately as Harley’s chief executive officer and not stand in the way of the company’s recruiting an external replacement, the people added. The firm is focused on the next CEO’s ability to connect with customers and dealers, they said.
Harley said last week that it was seeking a new CEO as Zeitz plans to retire after five years on the job. Harley said it retained an executive search firm in late 2024 after Zeitz expressed interest in retiring. Zeitz is expected to remain in his position until a successor is chosen.
H Partners’s Jared Dourdeville abruptly resigned from Harley’s board earlier this month, arguing in a now-public letter that Harley had suffered “cultural depletion" because of an extensive, white-collar work-from-home policy and the departure of several senior leaders, among other concerns.
“By airing the board’s confidential search and publicly campaigning against the company, the board believes Mr. Dourdeville is also adversely impacting the CEO search process," the company said in a statement, adding the campaign would impede execution of its strategy and put shareholders’ interests at risk.
Dourdeville, a partner at the firm, joined Harley’s board in 2022 as H Partners became what is now Harley’s second-biggest shareholder.
Dourdeville said he had been privately calling for the immediate resignation of Zeitz. Harley said that its directors had interviewed three potential CEOs but declined to offer any the role.
Zeitz helped boost Harley’s profit during his tenure, but sales of the company’s bikes have continued to decline as the brand struggles to resonate with a younger generation of riders.
Zeitz took over in 2020 as the Covid-19 pandemic took hold. He helped keep the Milwaukee-based company running, despite factory closings and supply-chain tangles. Still, complaints have mounted from dealers who have said that the company doesn’t offer enough for entry-level riders and that they have been loaded up with inventory that isn’t selling.
The company argues that it is holding up better than its competitors in a powersports market hurt by high interest rates and low consumer confidence.
H Partners will run a so-called withhold-the-vote campaign targeting Zeitz, who has been a board member for 18 years; Thomas Linebarger, who has been a board member for 17 years; and Sara Levinson, who has been a board member for 29 years, the people familiar with the matter said. (Harley’s bylaws require directors who don’t receive more than 50% of votes in an election to tender their resignations.)
The firm isn’t nominating replacement directors.
H Partners, based in New York, ran one of the first big withhold-the-vote campaigns in 2015 at the mattress maker Tempur Sealy. The firm has also struck agreements in the past with companies including Six Flags Entertainment and the motor manufacturer Remy International.
Write to Lauren Thomas at lauren.thomas@wsj.com and John Keilman at john.keilman@wsj.com
