Voting FOR Harley-Davidson’s Leadership: Safeguarding Value in a Critical Governance Crossroads

The outcome of Harley-Davidson’s May 14 shareholder vote will decide whether the iconic motorcycle manufacturer’s Hardwire strategy—a multiyear plan that has delivered superior financial results—advances under stable governance or stumbles into chaos at the hands of activist investor H Partners. With leading proxy advisor ISS explicitly endorsing the board’s nominees, shareholders face a stark choice: preserve continuity and institutional expertise or risk leadership instability that could upend Harley’s momentum. Voting FOR all director nominees on the WHITE proxy card is the only path to sustained value creation.

Why Governance Stability Matters Now

Harley-Davidson’s proxy fight is not just a battle over board seats—it’s a referendum on whether to trust a proven strategy or gamble on an activist’s disruptive agenda. The board’s Hardwire plan, launched in 2022, has already produced measurable outperformance relative to peers in the leisure/powersports sector:
- Operating margins: 13% (2022–2024), 4 percentage points above the peer median.
- Free cash flow (FCF): 70% of EBITDA (2022–2024), more than double the peer median.
- Total shareholder return (TSR): Outperformed peers by ~10 percentage points under CEO Jochen Zeitz’s tenure.

These metrics underscore the board’s ability to execute. ISS’s recommendation to vote FOR all nominees reflects this track record, while H Partners’ campaign—rooted in misleading claims and destabilizing tactics—threatens to disrupt a CEO transition process that is 90% complete.

The Risks of Activist Disruption

H Partners’ demand to remove three directors—Zeitz, Linebarger, and Levinson—rests on two pillars:
1. Alleged governance failures: H Partners claims the board made secret commitments to select shareholders about director departures, violating SEC rules.
2. Strategic ineffectiveness: It argues Harley’s equity value has fallen by $9 billion under current leadership, citing a flawed peer group and ignoring Harley’s operational discipline.

Both claims crumble under scrutiny:
- Peer group manipulation: H Partners uses irrelevant peers (e.g., Thor Industries) to misrepresent Harley’s performance. The board’s peer group—approved by H Partners during its three-year tenure—includes firms like Polaris and BRP, which align with Harley’s market position.
- Value destruction myth: Harley’s TSR outperformance and 25% reduction in share count since 2022 refute the idea of value erosion. H Partners’ focus on total equity value ignores the impact of macroeconomic headwinds and Harley’s deliberate inventory reductions to address dealer overhang.

Worse, H Partners’ tactics—leaking confidential candidate identities, distributing misleading proxy materials, and abruptly resigning its board representative—reflect a pattern of bad faith. These actions risk derailing the CEO search, deterring qualified candidates, and undermining the Hardwire plan’s progress in areas like electric vehicle innovation (via LiveWire) and operational discipline.

The Board’s Case for Continuity

Harley’s board defends its governance rigor:
- Annual director evaluations: Conducted by an independent committee, these reviews have shown no material concerns with board performance.
- Refreshed composition: 33% of directors have been added in four years, including two CEOs with public-company experience.
- CEO search transparency: The process, led by an executive search firm and a committee including H Partners’ representative, has followed institutional standards.

The board’s institutional knowledge is irreplaceable. Replacing its leadership now would introduce unwarranted risk to the CEO transition, which is critical to sustaining momentum in markets like Asia Pacific (where Harley’s sales have rebounded post-pandemic) and the U.S. (its core market).

A Call to Action for Shareholders

The stakes could not be higher. Voting WITHHOLD via H Partners’ BLUE proxy card risks:
1. CEO search delays: A contested vote could scare off top candidates, leaving Harley without leadership at a pivotal moment.
2. Strategic disarray: The Hardwire plan’s focus on cost discipline, electrification, and shareholder returns could unravel without continuity.
3. Market confidence erosion: Uncertainty would amplify volatility in Harley’s stock, which has already underperformed due to macroeconomic headwinds and inventory adjustments.

In contrast, voting FOR ALL nominees on the WHITE proxy card preserves:
- The CEO succession process: A seamless transition to a new leader with Harley’s heritage and strategic vision.
- Operational momentum: Continued execution of Hardwire’s FCF generation and capital returns ($1.4 billion to shareholders since 2022).
- Shareholder trust: A clear rejection of H Partners’ disruptive agenda and affirmation of ISS’s governance endorsement.

Conclusion: Vote FOR Stability, Reject Disruption

Harley-Davidson’s proxy fight is a test of shareholder priorities. The board’s track record of outperforming peers, ISS’s explicit support, and the existential risks of leadership disruption make the case for voting WHITE undeniable. Shareholders who choose otherwise will gamble with Harley’s legacy—and their own returns.

Act now. Vote FOR all director nominees. The future of Harley-Davidson depends on it.