Key Takeaways

  • Shareholder H Partners said in a securities filing Monday that Harley-Davidson CEO Jochen Zeitz had recommended the company's CFO, Jonathan Root, as a potential candidate to succeed him as the top executive after his retirement. The investment firm, which holds a 9.1% stake in the Milwaukee, Wisconsin-based motorcycle manufacturer, launched an activist campaign earlier this month calling for a change in company leadership. This is the latest development in the proxy fight between the two sides over the future of the company's leadership.
  • The filing comes just days after H Partners released a presentation related to its campaign on April 23, questioning whether a so-called "lame-duck" CEO should be allowed to make decisions for the company's future. One slide in the presentation read: "We believe that an outgoing CEO and directors with a track record of value destruction should not be making key long-term decisions."
  • In an 8-K filing with the U.S. Securities and Exchange Commission (SEC) on April 5, Harley-Davidson said that three previously unnamed CEO candidates—including one supported by H Partners partner and former board member Jared Dourdeville—had each failed to receive majority support from the company's independent directors. The filing also included Dourdeville's announcement that he would resign from the board.

Dive Into the Details

In a response Tuesday to what it called "H Partners' dishonest and harmful claims," Harley-Davidson stated that "after careful evaluation by the independent directors, H Partners' candidate failed to receive majority support from the board because the board determined that the candidate lacked the skills and qualities necessary to uphold Harley-Davidson's rich heritage and create value for all stakeholders."

The motorcycle manufacturer also characterized the shareholder's ongoing campaign as "disruptive," arguing that it "offers no constructive solutions that would benefit Harley-Davidson or its shareholders, and we believe its purpose is to allow H Partners to appoint unelected and unnamed directors—including an H Partners representative immediately after its representative just resigned from the board—thereby depriving shareholders of their right to choose their own representatives."

Harley-Davidson also claimed that H Partners has refused to disclose the identity of its preferred CEO candidate.

The motorcycle manufacturer began its search for the next CEO in the fourth quarter of 2024, following Zeitz's announcement of plans to step down in 2025 after five years in the role. According to a company announcement, Zeitz will continue to serve as CEO until a successor is found. Shortly after Zeitz took over as CEO in 2020, the company announced the "Hardwire" plan—a strategic initiative covering 2021 to 2025 aimed at enhancing shareholder value and creating long-term, profitable growth.

Based on the company's fourth-quarter and full-year 2024 results reported in February, the company faced significant headwinds over the past year, with high interest rates and declining customer confidence leading to lower motorcycle sales. For the fourth quarter ended December 31, Harley-Davidson reported a net loss of $117 million.

In urging leadership change, H Partners argued that Zeitz's Hardwire plan failed to meet key metrics and sought to force the resignation of Zeitz, lead director Thomas Linebarger, and another director, Sara Levinson. The presentation stated, "We believe they have failed to hold management accountable, and their interests appear misaligned with those of shareholders." In its announcement earlier this month, the firm urged shareholders to vote "against" the election of these three leaders at the annual shareholder meeting in May.

The investment firm also floated the idea of having another executive serve as interim CEO immediately in its presentation, stating, "We believe CFO and President of Commercial Operations Jonathan Root is effectively already managing day-to-day operations."

Root is a long-time company veteran who joined Harley-Davidson's financial services subsidiary in 2011 and was appointed CFO in 2023, as CFO Dive reported at the time. Last year, he was also named president.

The motorcycle manufacturer's annual shareholder meeting is scheduled for May 14. Harley-Davidson did not immediately respond to a request for comment. H Partners declined to comment beyond its filing.