The proxy fight between Harley-Davidson and activist hedge fund H Partners has intensified ahead of the company’s 14 May annual meeting, with major proxy advisory firms split over the future of the motorcycle maker’s board.
Institutional Shareholder Services (ISS), the leading proxy advisory firm, has thrown its support behind Harley-Davidson’s full slate of director nominees, citing meaningful progress under interim CEO Jochen Zeitz’s leadership and a methodical, good-faith CEO search process. The firm concluded that H Partners, which owns 9.3% of Harley-Davidson, failed to make a compelling case for change.
ISS credits the board for stabilising the business and improving performance following years of decline. ISS also criticised the dissident campaign for potentially derailing the CEO succession process, suggesting it was more reactive than constructive.
Two other major proxy advisory firms though – Glass Lewis and Egan-Jones – have sided with H Partners, and are urging shareholders to withhold support for three long-serving directors – Zeitz, Thomas Linebarger, and Sara Levinson. Both firms cited persistent underperformance, weak governance, and lack of accountability under the current board.
Glass Lewis highlighted that the directors in question have overseen “starkly suboptimal shareholder returns” and appear detached from the financial and operational challenges facing the company. “The board maintains the view that the Company is currently executing well… We believe there are evident causes to challenge that stance,” Glass Lewis wrote, pointing to missed targets under Harley’s “Hardwire” strategy.
Egan-Jones went further, calling CEO compensation “egregious” in light of shareholder value erosion and arguing that Harley’s long-term financial results reflect a fundamental failure of leadership.
H Partners has not publicly named replacement directors, but has signalled that its goal is to prevent what it sees as a flawed status quo from perpetuating.
In a statement, Harley’s board emphasised its commitment to shareholders and warned that H Partners is attempting to bypass corporate governance norms to install hand-picked directors and steer the CEO search. “We believe [ISS’s] recommendation underscores the board’s important role in overseeing management’s execution of our strategy,” said Tom Linebarger, presiding director.
