By Lauren Thomas and John Keilman

A major Harley-Davidson shareholder is fighting to shake up the motorcycle maker's board and quickly replace its chief executive in the face of deteriorating sales.

In an open letter Wednesday, investment firm H Partners urged shareholders to remove three longstanding directors from Harley's eight-member board at an upcoming annual meeting in mid-May.

H Partners, which has a roughly 9% stake in Harley, said the company failed nearly every objective in its strategic plan and that "it has become clear to us that meaningful change is necessary at both the Board and CEO levels."

The Wall Street Journal reported on the investment firm's plans Tuesday.

H Partners is calling for Jochen Zeitz to immediately step down as Harley's chief executive and not stand in the way of the company recruiting an external replacement. Zeitz also serves as chairman.

Harley said last week that it was seeking a new CEO as Zeitz plans to retire after five years on the job. Harley said it retained an executive search firm in late 2024 after Zeitz expressed interest in retiring. Zeitz is expected to remain in his position until a successor is chosen.

H Partners's Jared Dourdeville abruptly resigned from Harley's board earlier this month, arguing in a now-public letter that the motorcycle maker had suffered "cultural depletion" because of an extensive, white-collar work-from-home policy and the departure of several senior leaders, among other concerns.

"By airing the board's confidential search and publicly campaigning against the company, the board believes Mr. Dourdeville is also adversely impacting the CEO search process," the company said in a statement, adding the campaign would impede execution of its strategy and put shareholders' interests at risk.

Dourdeville, a partner at the firm, joined Harley's board in 2022 as H Partners became what is now Harley's second-biggest shareholder.

Dourdeville said he had been privately calling for the immediate resignation of Zeitz. Harley said that its directors had interviewed three potential CEOs but declined to offer any the role.

Zeitz helped boost Harley's profit during his tenure, but sales of the company's bikes have continued to decline as the brand struggles to resonate with a younger generation of riders.

Zeitz took over in February 2020 as the Covid-19 pandemic took hold. He helped keep the Milwaukee-based company running, despite factory closings and supply-chain tangles. Still, complaints have mounted from dealers who have said that the company doesn't offer enough for entry-level riders and that they have been loaded up with inventory that isn't selling.

Harley shares have lost around 30% of their value since Zeitz became CEO, bringing its market value to about $2.7 billion. The company argues that it is holding up better than its competitors in a powersports market hurt by high interest rates and low consumer confidence.

H Partners is running a so-called withhold-the-vote campaign targeting Zeitz, who has been a board member for 18 years; Thomas Linebarger, who has been a board member for 17 years; and Sara Levinson, who has been a board member for 29 years. (Harley's bylaws require directors who don't receive more than 50% of votes in an election to tender their resignations.)

The firm isn't nominating replacement directors.

H Partners, based in New York, ran one of the first big withhold-the-vote campaigns in 2015 at the mattress maker Tempur Sealy. The firm has also struck agreements in the past with companies including Six Flags Entertainment and the motor manufacturer Remy International.

Write to Lauren Thomas at lauren.thomas@wsj.com and John Keilman at john.keilman@wsj.com

(END) Dow Jones Newswires

April 16, 2025 08:13 ET (12:13 GMT)

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