The fight for control of Harley-Davidson continues, and things are beginning to heat up. Both the MoCo and H Partners have submitted new filings to the SEC in an attempt to inform shareholders of their respective positions. H Partners has come out swinging with their “Free The Eagle” campaign and an associated “Campaign Fact Sheet” that concentrates on the purported failures of Harley-Davidson’s current Board of Directors. Responding to H Partners, Harley-Davidson is counterpunching with their own program touting their “…Highly Qualified Board” and their “…exceptional experience and perspectives…”

In The Green Corner

In the green corner of the ring stands H Partners where shareholder return is paramount and cash is king. Weighing in with about 9 percent of Harley’s stock, the lightweight appearing but heavy punching contender stands ready. Their fighting arsenal is an a extended lineup of alleged failures of Harley-Davidson’s current Board members. Supporting their fight for America’s largest motorcycle company is a blue proxy card that asks shareholders to vote “withhold” their votes for Chairman, President and CEO of Harley-Davidson Jochen Zeitz, Presiding Director Thomas Linebarger, and long tenured Director Sara Levinson.

H Partners’ Fight Plan

H Partner’s fight craft consists of jabs asserting that Harley-Davidson’s current Board members have had “Major Execution Issues.” Specifically, they identify the following three points:

• Major execution issues at H-D, overseen by an absentee CEO;
• A CEO and Presiding Director who have not been fully transparent with the rest of the Board;
• “Certain long-tenured Board members who have been unwilling to hold the CEO accountable for severe value destruction and the cultural depletion of this iconic American company.”

H Partner’s Free The Eagle logo. Screengrab: H Partners

The bigger and heavier punches come in the form of five purported failures:

• Shareholder Value Destruction – Claiming that Zeitz, Linebarger, ad Levinson “…have an alarming record of shareholder value destruction…”
• Poor Performance – Claiming that under Zeitz, Harley-Davidson’s market value has declined approximately $1.8 billion.
• Low Dealer Sentiment – Claiming “…dealer sentiment is near a decade-long low.”
• Failed Hardwire Strategy – Claiming that Harley-Davidson’s Hardwire strategic plan has not driven “…profitable growth and shareholder value.”
• Inability To Course Correct – Claiming that Harley-Davidson’s poor performance is “…due to an inability to course-correct, in part because the CEO and Presiding Director have seemingly prevented the appropriate flow of information to the Board, and the Board has been unwilling to hold the CEO accountable for his failures.”

FAQing

Finally, H Partner’s ring men are supporting the fight with a list of frequently asked questions designed to cast doubt on Harley’s current executive leadership and tell shareholders that they can shape Harley’s future. They also inform shareholders about what H Partners believes, who can participate in the proxy fight, and its associated ins and outs. They have developed their own blue proxy cards for shareholders to vote the H Partner’s line.

Summarizing The Contender

As the contender, H Partners appears to be well trained and ready to fight. If their claims are accurate, and they are able to land their heavy punches in front of Harley’s shareholders, there’s a distinct possibility that the current champion could fall or at least be staggered. Either event could result in significant changes in Harley’s leadership, or at least a change in Harley’s strategy. Are H Partners’ chances a longshot? We’ll find out soon.

In The Orange And Black Corner

Apparently in response to H Partner’s “Free The Eagle” campaign and website, Harley-Davidson has launched its own strategic proxy website “Vote Harley Davidson.” The keystone to the current champion’s fighter is its title, “Guided By Experience. United By Purpose.” The champ arrives in the ring heavily tattooed with a full back tat claiming “Harley-Davidson’s Board is focused on securing the Company’s future while preserving the Company’s legacy. Together, we are committed to driving innovation, delivering growth, and creating value for all shareholders.”

Harley-Davidson’s Vote Harley Davidson website reduces Jochen Zeitz’s profile and displays him last among the current Board members. Lori Flees is still only a Director nominee. Screengrab: Harley-Davidson

Harley’s Fight Plan

Upon closer inspection of the website, there are pictures with each of the Board of Directors’ names, their position on the Board, and a full biography of each Board member. Once inside each of the Board members’ biographies, Harley-Davidson lists the Board member’s name, the committee(s) they serve on, a bulleted list of qualifications, and a more detailed biography.

Interestingly, the MoCo’s Chairman of the Board of Directors and CEO, Jochen Zietz, is shown as the last member of the Board with the exception of Lori Flees, who at this time is only a nominee for Harley-Davidson’s Board of Directors. However, its current day-to-day investor website shows Zeitz prominently displayed first, not last.

Harley-Davidson’s current investor site shows Jochen Zeitz prominently as the Chairman, President, and Chief Executive Officer. Screengrab: Harley-Davidson

Harley’s website also provides jabs of resources where interested parties can find certain proxy materials, as well as a letter to shareholders. It is perhaps the most significant of Harley’s posted resources, with material that outlines what Harley-Davidson believes it has done so far and how it plans to perform in the future.

Some of the letters’ more significant points include:

• Over the past four years, the Board has been laser-focused on executing the Hardwire, its strategic plan to strengthen the foundation for the future.
• Harley’s “…Transformation Is Well Underway.”
• Touts the MoCo’s “Profit Focus.”
• “Returned highest profit category, U.S. Touring, to growth in 2021 with 74.5% market share in 2024 and ~5% growth year over year.”
• Reduced dealer inventory

Selling The Board Of Directors

It’s clear that the MoCo is trying to sell its Board of Directors to its shareholders. That makes sense since H Partners is directly attacking some Harley Board members. Harley-Davidson likely feels that it needs to reinforce with investors the experience each Director possesses.

Harley-Davidson is also pointing out some of its “successes” during the Board’s tenure. However, the paramount barometer of how well a Board is performing is its company’s financial performance. It’s here where Harley-Davidson is lacking, so the MoCo will have to shine the spotlight on the areas they believe they have succeeded and shy away from those areas where they did not.

Knockout Punch Out Of Nowhere

Amongst all this jousting and sparring, there could be a rabbit knock-out punch before the fight is over. Harley-Davidson will report its first quarter results on May 1, 2025, at 8:00 AM Central time. The outcome of its Q1 2025 financial performance could significantly sway investors one way or the other.

At the end of 2024, Harley’s executive management set expectations rather low. Their outlook said Harley-Davidson Motor Company revenue would be at best flat. As for Harley-Davidson Financial Services, they said that operating income would be down 10% to 15%. Earnings per share could be flat to down 5%, and its electric motorcycle branch, LiveWire, would post an operating loss of $70 to $80 million.

So if Harley is able to pull off any upward-looking performance at their Q1 2025 meeting, they have a chance to suggest to investors that the fight is under control. But if their earnings are at or below their forecasted expectations, it could be the rabbit punch that brings Harley’s champion to his knees. Needless to say, Harley’s Q1 2025 earnings meeting could have a significant impact that could save the current board, or knock it out.

If the earnings call is positive, expect Harley management to tout the beginning of a turnaround. If the news is bad, expect H Partners to dance around Harley’s champion landing blows that the champ has difficulty blocking. Regardless, it’s likely to be a blockbuster fight.

The Referee(s)

Refereeing the bout will be approximately 800 institutional owners and shareholders. Retail investors hold only a little over 3 percent of Harley’s stock and likely will play only a small role in the bout’s decision. However, if no knockout punch is thrown and the match is nearly tied after the last bell, those investors could shape the future of MoCo.

The Fight Has Begun

While the MoCo is yet to announce its Q1 2025 earnings, and its annual shareholders meeting is weeks away, the fight between the two titans has begun. After round 2, one ref scores the bout 13 – 11 in favor of the green corner. But there’s a lot of fighting still to come, and a single big blow could take the win. We’ll know more after Harley holds its annual meeting on May 14, 2025.