Harley-Davidson is in a bad way, having unexpectedly lost its CEO in February amid declining sales and a general non-appetite for heavy motorcycles. For most companies, this might lead to some reflection about changing their ways, perhaps some long walks in the woods. For Harley, it seems content to keep doing the exact same thing.
The news, from Friday via Bloomberg, is that Impala Asset Management, an investment fund that owns 1.2 per cent of Harley, was maybe thinking about nominating two new members to Harley’s board, which in the world of publicly owned corporations counts as an aggressive move against the status quo.
This was revealed in a filing with the U.S. Securities and Exchange Commission. And while that filing did not say who Impala might nominate—or that any nomination formally took place at all—you don’t have to be a brain genius to have a look at Harley and conclude that the current board isn’t exactly killing it. Still, since Jochen Zeitz—also a Harley board member—took over as acting CEO following Matt Levatich’s departure, every signal from the company has basically been full steam ahead, no course correction needed.
It wasn’t terribly surprising, then, that that was also Harley’s response to Impala in the filing, saying that the nine board nominees (which constitute the current board) are just fine. Good, in fact.
We believe that our nine nominees have the right experience, have a deep understanding of our company and its markets, and are more capable than the Impala nominees to lead our company forward. We believe the candidates proposed by Impala would not add additional skills or diversity to the Board as their stated skill sets are already well-represented among our nine candidates.
In that same filing, Zeitz also announced this interesting new metric for how it will judge its own success:
As further evidence of this transformation, in 2020 we will expand our focus from heavyweight motorcycle unit shipments to revenue from motorcycles and related products segment as a primary objective and measure for the year. This measure best reflects our comprehensive efforts to expand into new product segments and foster a customer-creation culture - one that is laser-focused on our riders and fans who are passionate about our great brand. Looking forward, our efforts will only intensify.
Nevermind that we keep shipping fewer and fewer bikes! The new goalpost is revenue! As you were!
But back to Impala and the board, since the whole filing (which you can read here if you want, though life is short and I don’t necessarily recommend) is an extended exercise in protesting too much. I don’t know anything about Impala, but all it took for Harley to produce the following matrix was merely the suggestion of new board members.
Current board members’ names are up top, and their alleged skills to the left:
All of those names up top are an assortment of current and former CEOs of companies like Chipotle, Cummins, and Levi Strauss. On paper these folks are all highly accomplished, it’s true! What’s interesting is that, on paper, they should be able to figure this out. Look at all those skills in one room! But very clearly on paper Harley keeps losing.