With Harley sales slipping and dismal returns, investment firm H Partners is demanding the removal of three Harley board members, including the CEO and current chairman Jochen Zeitz.
In an open letter to shareholders Wednesday, the firm slammed what it called a “widening gulf between reality and the Company’s perception of reality,” and said the board needs immediate change.
Zeitz, who plans to retire this year, is already on his way out, but H Partners wants him gone now.
The firm is pushing for Harley to appoint an internal interim CEO and accused Zeitz of spending “far more time in New Mexico, the United Kingdom, and rural Kenya” than in Milwaukee, where the company is headquartered.
“It defies logic for Mr. Zeitz, an outgoing CEO with a poor track record, to be making key decisions that impact the Company’s future,” the letter stated.
In the crosshairs are also board members Thomas Linebarger, a 17-year veteran, and Sara Levinson, who has served nearly three decades.
H Partners is launching a withhold-the-vote campaign to shake up Harley’s leadership.
The backstory
The push follows the resignation of Jared Dourdeville, an H Partners principal who stepped down from Harley’s board earlier this month.
Dourdeville joined the board in 2022, when H Partners became Harley’s second-largest shareholder with a 9.1% stake.
In his resignation letter, Dourdeville highlighted stark underperformance. Since Linebarger joined the board, Harley shares are up just 13%, versus 447% for the S&P 500 — and 511% for Harley’s self-reported peer group.
Under Zeitz’s tenure since 2020, the stock has gained 40%, compared to a 388% rise in the S&P and 294% for peers.
“While I am concerned about this severe underperformance, what I am most concerned about are the foundational building blocks that underpin any company's long-term trajectory: culture, transparency and accountability, and the willingness of the Board and management to put the Company first,” Dourdeville wrote.
Harley fired back, accusing Dourdeville of undermining its CEO search.
“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.
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