Purple Chip Capital Supports H Partners' Campaign for Change at Harley Davidson, Announces Intent to WITHHOLD its Votes at 2025 Annual Meeting of Shareholders

Rhea-AI Summary

Purple Chip Capital announces support for H Partners' campaign for change at Harley Davidson (NYSE:HOG) and plans to withhold votes for CEO/Chairman Jochen Zeitz and Directors Thomas Linebarger and Sara Levinson at the 2025 Annual Meeting.

The investment firm criticizes the current board for:

• Neglecting Harley's distinctive culture and dealer network
• Shifting focus to online sales
• Introducing off-brand product lines
• Launching the "misguided" electric Livewire bikes
• Using lower-quality plastic parts instead of chrome, steel, and leather

Purple Chip Capital advocates for:

• Strengthening dealer partnerships
• Discontinuing the Livewire electric line
• Reintroducing the Sportster 883 as an entry-level motorcycle
• Returning to high-quality materials and parts
• Refocusing on attracting next-generation riders

Positive

• Support from major shareholders (Purple Chip Capital and H Partners) for strategic change indicates potential for corporate governance improvement
• Shareholders pushing for return to core business model that historically drove success

Negative

• Current management's shift away from dealership-focused business model weakening core revenue channels
• Failed Livewire electric motorcycle strategy requiring potential discontinuation
• Quality reduction through cost-cutting measures (plastic vs. chrome/steel parts) affecting brand premium
• Declining dealer network strength impacting community-based business model
• Board disconnection from core business values affecting strategic direction

Insights

Corporate Governance Analyst

Purple Chip Capital's vote withholding signals escalating shareholder activism at Harley Davidson, challenging leadership and strategic direction.

Purple Chip Capital's announcement represents a significant escalation in shareholder activism at Harley Davidson. By publicly supporting H Partners' campaign and declaring intent to withhold votes for CEO/Chairman Jochen Zeitz and directors Thomas Linebarger and Sara Levinson, this signals growing institutional investor dissatisfaction with HOG's governance and strategy.

The targeted withholding of votes for the CEO/Chairman position is particularly noteworthy, as it challenges the combined governance role that often presents potential conflicts of interest. This resistance could potentially force board restructuring or leadership changes.

The shareholder criticism centers on strategic decisions that fundamentally altered HOG's business model:

• Shift toward online sales diminishing dealer networks
• Electric motorcycle initiative (Livewire) described as "horribly misguided"
• Cost-cutting measures affecting product quality (plastic vs. chrome/steel/leather)
• Moving away from customization options that differentiated the brand

From a governance perspective, this represents a classic principal-agent conflict where shareholders believe management has diverged from optimizing long-term shareholder value. The coordination between multiple shareholders (Purple Chip supporting H Partners) increases the probability of meaningful voting impact at the 2025 meeting.

Based on the shareholder critiques, the board may have failed to effectively balance innovation with brand stewardship, leading to this governance challenge. The outcome will likely depend on how widespread this shareholder sentiment is among HOG's investor base.

Financial Analyst

Coordinated shareholder activism indicates serious concerns about HOG's strategic investments and business model changes, creating uncertainty.

Purple Chip Capital's announcement reveals significant investor concerns about Harley Davidson's strategic direction, though no specific financial metrics are cited in the release. Their explicit support for H Partners' campaign suggests coordinated shareholder activism, which substantially increases pressure on management.

The shareholders' critique focuses on several business model shifts they believe are undermining HOG's core value proposition:

• Diminishing the dealer network in favor of online sales
• Investing in the electric Livewire motorcycle line ("horribly misguided")
• Cost-reduction through lower-quality materials (plastic accessories vs. chrome)
• Moving away from the customization options that differentiated the brand

Notably, shareholders are advocating for specific product strategy changes, including discontinuing the Livewire line and reintroducing the Sportster 883 as an entry-level motorcycle - indicating desire for product portfolio reorientation toward traditional offerings.

While the release doesn't provide quantitative performance data, shareholders' concerns about dealer financial health ("Without financially successful dealerships...performance will continue to suffer") implies business model changes may be negatively impacting HOG's sales network and potentially overall revenue streams.

The withholding of votes for three directors, including the CEO/Chairman, represents a formal governance challenge that could lead to leadership changes and strategic pivots, creating uncertainty about HOG's future direction and potentially volatile trading conditions in the near term.

Calls out Disconnected Board of Directors and Misaligned Strategic Direction

CANTON, Ga., April 29, 2025 /PRNewswire/ -- Purple Chip Capital Management, LLC ("Purple Chip Capital"), a value-oriented investment manager and long-term shareholder of Harley Davidson, Inc. (NYSE:HOG) ("Harley Davidson" or the "Company"), today issued the following statement supporting H Partners' campaign for change at Harley-Davidson and announcing its intent to WITHHOLD its votes on the election of CEO and Chairman Jochen Zeitz, and Directors Thomas Linebarger and Sara Levinson at the Company's 2025 Annual Meeting of Shareholders. 

"As long-term Harley Davidson shareholders and customers, we have watched in dismay as the Company has drastically strayed from the core tenets that made it a true and lasting American icon. Being a Harley Davidson owner has always been so much more than simply owning a bike. It has meant becoming a part of the distinctive culture and community that is so widely recognized across the United States. A community that was built upon a national network of dealerships that have served as hubs, delivering location-specific service, exclusive events and highly customized optionality around the bikes and products that Harley Davidson is known for.

Under the current Board of Directors, that culture has been neglected, weakening the engine that has motored Harley Davidson forward for nearly 125 years in favor of online sales, egregiously off-brand product lines and a departure from the high-quality optionality that made each and every Harley Davidson bike truly unique. Harley Davidson deserves a board of directors that recognizes what makes the Company special and that treats their dealers like the partners, customers and value-drivers that they are. Without financially successful dealerships, the community we are all proud to be a part of will fade and performance will continue to suffer. 

On the product front, the Company must acknowledge that the electric Livewire line of bikes was horribly misguided and should be discontinued. Harley Davison owners do not want an electric engine, they desire raw American power. Instead, the Company needs to refocus its efforts on attracting the next generation of Harley riders, revamping the lineup, and bringing back the iconic Sportster 883 as an entry level motorcycle. Furthermore, an ongoing focus on cost reduction through the introduction of plastic accessories, trim, and customization has drastically reduced the appeal of the full Harley Davidson line of products. It is time to reignite the pride that Harley Davidson riders have always had in their bikes and the Company, and to bring back the highest-quality parts and accessories made with chrome, steel and leather. 

We were thrilled to see H Partners voice the same concerns we have regarding the road Harley Davidson is currently embarking on, and we intend to WITHHOLD our votes for Directors Zeitz, Linebarger and Levinson at the Annual Meeting. We believe unseating those three long-tenured directors, who are clearly disconnected with what Harley Davidson has built its legacy on, would serve as a baseline step towards returning the Company to glory for the benefit of its riders, dealers and stockholders." 

About Purple Chip Capital
Purple Chip Capital Management is an investment management company founded and run by Jason T. Dickerson and known for its value-oriented investment strategy and long-term approach to investing. Based in Canton, Georgia, Purple Chip Capital focuses on identifying undervalued companies, typically with a concentrated portfolio strategy, and if needed, actively engages with management to improve performance.

Media Contact 
ASC Advisors
Max Rayden
mrayden@ascadvisors.com
203 992 1230 

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SOURCE Purple Chip Capital Management, LLC

FAQ

Why is Purple Chip Capital withholding votes from Harley Davidson (HOG) directors in 2025?

Purple Chip Capital is withholding votes from CEO Jochen Zeitz and Directors Linebarger and Levinson due to concerns about HOG's strategic direction, including the shift away from dealership networks, focus on online sales, and introduction of electric bikes like Livewire.

What are the main criticisms of Harley Davidson's (HOG) current strategy in 2025?

The main criticisms include neglecting dealer networks, pursuing electric motorcycles (Livewire), using lower-quality plastic parts instead of chrome and steel, and moving away from the traditional Harley Davidson culture and community.

What changes does Purple Chip Capital want at Harley Davidson (HOG)?

Purple Chip Capital wants HOG to discontinue the Livewire electric line, bring back the Sportster 883, strengthen dealer networks, return to high-quality chrome and steel parts, and refocus on attracting the next generation of traditional Harley riders.

How is H Partners involved in the 2025 Harley Davidson (HOG) board challenge?

H Partners launched a campaign for change at Harley Davidson, which Purple Chip Capital is supporting by also withholding votes from three directors at the 2025 Annual Meeting of Shareholders.

What is the impact of Harley Davidson's online sales strategy on dealerships?

According to Purple Chip Capital, HOG's shift to online sales is weakening the dealership network, which has traditionally served as community hubs providing local service, exclusive events, and customization options.