Harley Giving Shareholders Power to Nominate Board Members
Move will allow greater investor influence at the struggling U.S. motorcycle maker.
(Bloomberg) -- Harley-Davidson Inc. plans to grant long-term shareholders the power to directly nominate board members, a move that could boost investors’ influence at the slumping U.S. motorcycle maker.
So-called proxy access will give an investor, or a group of up to 20 shareholders, owning at least 3% of Harley’s stock for at least three years the right to name as many as a fifth of nominated directors, the company said in a filing Wednesday. The measure still has to be approved at its annual meeting.
Harley would follow a long list of U.S. companies including General Motors Co., FedEx Corp. and Amazon.com Inc. that have empowered investors in this way. The change reflects boards’ willingness to engage with investors who are more long term-oriented than increasingly powerful activists. Getting a slate of directors on the ballot without a company’s cooperation can otherwise be expensive.
Harley shares, which have plummeted almost 40% in the past three years, dipped 0.3% as of 1 p.m. in New York.
The iconic manufacturer is struggling to stoke demand in its home market, where sales have dropped the last 11 quarters. Chief Executive Officer Matt Levatich amended a key long-term growth target in September, telling investors the company will aim to add 1 million U.S. riders in the decade through 2027. While his previous goal was to add 2 million, the new objective accounts for stepped-up efforts to retain existing riders.
Michael Cave, the former president of Boeing Co.’s lending unit, has been Harley’s chairman since May 2016. Other directors on the board include Thomas Linebarger, the CEO of diesel-engine maker Cummins Inc., and Troy Alstead, the former chief operating officer of Starbucks Corp.
Harley’s turnaround plan calls for attracting younger riders in the U.S. and more consumers in overseas markets with cheaper, lighter-weight bikes. To achieve this, Levatich hired the company’s first-ever brand president last April, only to dismiss him six months later, citing conduct that didn’t align with company culture.
--With assistance from Phil Serafino.
To contact the reporters on this story: Tara Patel in Paris at tpatel2@bloomberg.net;Gabrielle Coppola in New York at gcoppola@bloomberg.net
To contact the editor responsible for this story: Craig Trudell at ctrudell1@bloomberg.net
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