Harley-Davidson faces board fight from H Partners amid calls for CEO to exit soon

(Reuters) -Investment firm H Partners has urged Harley-Davidson (NYSE:HOG)’s shareholders to remove three directors from the board, including its CEO, holding them responsible for the company’s declining sales and falling stock price.

H Partners, the iconic American brand’s second-largest investor with a 9.1% stake, made the latest move days after the firm called on CEO Jochen Zeitz to step aside immediately.

Zeitz, who became the CEO in 2020, is expected to retire this year but has said he would stay until a replacement was found.

Harley, currently valued at $2.7 billion, has seen its share price drop 45% over the past year and decline 43% since April 2022 as the company struggles to appeal to new generations of riders.

The investment firm intends to run a withhold-the-vote campaign to push out Zeitz, who has served as a director for 18 years, Norman Thomas Linebarger, who has been a director for 17 years, and Sara Levinson, a board member for 29 years, according to a letter released on Tuesday.

"We believe Mr. Zeitz, Mr. Linebarger, and Ms. Levinson should be held accountable for the destruction of shareholder value," H partners said in a statement.

Harley did not immediately respond to a Reuters request for comment on the letter.

H Partners did not suggest any alternative candidates in the letter.

H Partners’ Jared Dourdeville last week resigned from Harley’s board, saying the company experienced "cultural depletion" due to the departure of senior leaders and its remote working policies.

Harley’s board consists of eight members and the company is scheduled to hold its annual meeting on May 14.

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Five years ago at the start of the COVID-19 pandemic, Harley faced a boardroom challenge from another investment firm, Impala Asset Management, but quickly settled that fight amid the uncertainty of the health crisis.

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