Harley-Davidson Addresses Shareholders Amid Leadership Changes and Future Growth Strategy

Harley-Davidson's Call to Action for Shareholders

On May 5, 2025, Harley-Davidson Inc. (NYSE: HOG) reached out to its shareholders with a significant letter as part of its upcoming 2025 Annual Meeting set for May 14. This communication comes at a crucial juncture in the company's 120-year history, highlighting the necessary skills and experiences to select the next CEO while preserving the brand's legacy.

Background of the Letter

In the face of increasing challenges, Harley-Davidson asserts that it has demonstrated resilience and outperformed its peers in the current operating environment. The letter reiterated the importance of the iconic brand and urged shareholders to support its Director nominees, suggesting a vote for the White proxy card—indicating their confidence in the current board.

The board takes a firm stance against what they term as the misleading and harmful campaign by H Partners, a notable investment firm that had a board representative for the last three years. During this time, H Partners had shown consistent support for the company's strategies and leadership. The abrupt change in H Partners' approach—now calling into question the board's integrity and strategy—raises concerns for the board regarding the long-term implications for shareholder value and the company's strategic direction.

Key Highlights of Harley's Position

1. Preservation of Legacy and Leadership Transition: The board emphasized its commitment to maintaining Harley-Davidson's legacy while navigating through current industry challenges. They intend to lead a smooth transition for the next CEO, underlining that their Director nominees possess the necessary experience and institutional knowledge.

2. Criticism of H Partners: The board accused H Partners of launching a contentious campaign that undermines the progress made thus far. They pointed out that H Partners had previously supported the strategic direction and management during their tenure on the board, only to shift blame and tactics abruptly when their preferred CEO candidate did not achieve majority support from the board.

3. Call for Shareholders to Act: Harley-Davidson appealed to shareholders to participate in the voting process, urging them to disregard any conflicting proxy cards from H Partners. The company's board believes that a unified approach—voting for their Director nominees—is essential to continue the transformation and sustain shareholder value in the future.

Longevity and Strategic Planning

The board's letter also described Harley-Davidson's efforts toward sustainable growth. Despite operating in a tumultuous market, the company has maintained robust operating margins and free cash flow significantly exceeding industry medians. This persistence showcases their strategic planning capabilities amidst adversity.

The board members, including CEO Jochen Zeitz and experienced executives like Norman Thomas Linebarger and Sara Levinson, are heralded for their collective skills which are deemed essential for selecting the next CEO.

H Partners' Shift and Its Implications

The shift in H Partners’ strategy has raised eyebrows across the industry. Initially, they indicated satisfaction with the direction the brand was heading and expressed confidence in the company’s growth prospects and leadership. However, following a failed attempt to place their preferred CEO candidate, they have turned to publicly criticize the board and undermine existing strategies, which the board finds detrimental.

Harley-Davidson's letter encapsulates a crucial moment where the company not only seeks to clarify its position but also to call for unity among its shareholders as it presses forward into a new chapter of leadership and strategic growth.

In conclusion, Harley-Davidson is rallying its shareholders to maintain focus on the brand's legacy, instill confidence in its Board of Directors, and participate actively in upcoming decisions that will shape the company's future trajectory. The outcome of this discussion will undoubtedly influence the direction of one of America's most renowned biking brands as it enters its next century of operation.