Introduction
In recent weeks, Harley-Davidson, the iconic American motorcycle manufacturer, has found itself at the center of a contentious proxy battle. Activist investor H Partners, holding approximately 9.1% of the company’s shares, has launched a campaign to unseat CEO and Chairman Jochen Zeitz, along with two long-serving board members, citing concerns over poor performance, weak execution, and flawed corporate governance. This dispute has drawn attention from major proxy advisory firms, with Glass Lewis and Egan-Jones recommending shareholders vote to remove the targeted directors, while Institutional Shareholder Services (ISS) has opposed the move.
The conflict underscores broader tensions in corporate governance, particularly regarding the balance of power between entrenched management and activist shareholders. It raises critical questions about the role of proxy advisory firms, the effectiveness of shareholder activism, and the mechanisms in place to hold corporate leadership accountable.
“This proxy battle is emblematic of the evolving dynamics in corporate governance, where shareholders are increasingly assertive in demanding accountability and strategic alignment from company leadership,” says Professor Emily Thompson, a corporate governance expert at the University of Chicago.
Legal and Historical Background
The legal framework governing proxy battles and shareholder activism in the United States is primarily rooted in the Securities Exchange Act of 1934, which mandates disclosure requirements for proxy solicitations. Under Regulation 14A, any party seeking to solicit proxies must file detailed information with the Securities and Exchange Commission (SEC), ensuring transparency in the process.
Historically, shareholder activism has evolved from a relatively rare occurrence to a common feature of corporate governance. Notable cases, such as the proxy fight at DuPont in 2015, where activist investor Trian Fund Management sought board representation, have highlighted the increasing influence of shareholders in corporate decision-making. These events have prompted discussions about the appropriate balance between management autonomy and shareholder oversight.
“The rise of shareholder activism reflects a shift in the corporate landscape, where investors are no longer passive stakeholders but active participants in shaping company strategy,” notes Professor Jonathan Green, a legal scholar at Harvard Law School.
Case Status and Legal Proceedings
The current proxy battle at Harley-Davidson centers on H Partners’ campaign to remove CEO Jochen Zeitz and board members Thomas Linebarger and Sara Levinson. H Partners has filed a definitive proxy statement with the SEC, urging shareholders to vote “withhold” on the election of these directors at the upcoming annual meeting scheduled for May 14, 2025.
In response, Harley-Davidson has defended its leadership, emphasizing the company’s strategic initiatives and financial performance. The company argues that the proxy campaign is a distraction during a critical CEO succession process, as Zeitz has announced plans to retire later this year.
The involvement of proxy advisory firms has added complexity to the situation. While Glass Lewis and Egan-Jones have supported H Partners’ position, ISS has recommended against the removal of the directors, citing concerns about the potential disruption to the company’s leadership transition.
Viewpoints and Commentary
Progressive / Liberal Perspectives
From a progressive standpoint, the proxy battle is seen as a necessary check on entrenched corporate leadership. Advocates argue that long-serving directors may become complacent, leading to strategic stagnation and underperformance. They emphasize the importance of board diversity and fresh perspectives in driving innovation and responsiveness to stakeholder concerns.
“Shareholder activism serves as a vital mechanism for holding corporate boards accountable, particularly when leadership fails to adapt to changing market dynamics and stakeholder expectations,” asserts Lisa Martinez, director of the Corporate Accountability Project at the Center for Progressive Reform.
Progressives also highlight the role of proxy advisory firms in empowering shareholders to make informed decisions, advocating for increased transparency and independence in their analyses.
Conservative / Right-Leaning Perspectives
Conversely, conservative commentators caution against the potential overreach of activist investors, warning that frequent leadership changes can undermine long-term strategic planning and stability. They argue that experienced directors bring valuable institutional knowledge and that abrupt shifts in governance may disrupt company operations.WSJ+1MarketWatch+1
“While shareholder input is essential, it’s important to balance this with the need for consistent leadership that can execute long-term strategies effectively,” remarks Thomas Caldwell, senior fellow at the American Enterprise Institute.
Conservatives also express concern about the influence of proxy advisory firms, suggesting that their recommendations may not always align with the best interests of all shareholders, particularly those focused on long-term value creation.
Comparable or Historical Cases
The current proxy fight at Harley-Davidson is not an isolated incident in the annals of corporate governance. Rather, it joins a lineage of shareholder rebellions that have reshaped the landscape of boardroom dynamics in the U.S. Two cases in particular provide instructive parallels: the proxy contests at DuPont in 2015 and Hess Corporation in 2013.
At DuPont, activist hedge fund Trian Fund Management, led by Nelson Peltz, launched an aggressive campaign to secure board seats, citing lagging performance and underutilization of assets. Though Trian’s nominees ultimately lost the vote, the campaign had a lasting impact: DuPont’s CEO Ellen Kullman resigned later that year, and the company pursued strategic restructuring. This instance revealed how activist pressure—successful or not—can lead to fundamental organizational changes. “Even a failed proxy vote can exert strategic influence if shareholder concerns resonate deeply enough with institutional investors,” noted Professor David Skeel of the University of Pennsylvania Law School.
Similarly, in 2013, Elliott Management took aim at Hess Corporation, advocating for operational efficiency and changes to capital allocation. Elliott won five board seats, a significant victory that catalyzed a reorganization of the company. The firm’s success became a model for shareholder activists, demonstrating that disciplined, well-reasoned campaigns could result in both governance reforms and financial gains.
Both of these cases show that targeted proxy campaigns—especially those backed by detailed critiques and clear objectives—can reshape company trajectories. H Partners appears to be following a similar blueprint in its challenge to Harley-Davidson, focusing on perceived lapses in strategic direction and executive accountability.
These historical examples also underscore the central role of proxy advisory firms, whose recommendations often sway institutional shareholders. In both DuPont and Hess, firms like ISS and Glass Lewis played influential roles, highlighting how third-party assessments increasingly drive boardroom outcomes.
The Harley-Davidson episode thus represents both a continuation of and departure from earlier cases. Like DuPont and Hess, it features activist discontent with entrenched leadership. Yet the added complexity of a pending CEO succession injects a unique variable. Whether the campaign succeeds or not, the long-term impact may mirror those earlier cases: intensified scrutiny, stronger governance practices, and perhaps a shift in how American corporations respond to shareholder unrest.
Policy Implications and Forecasting
The Harley-Davidson proxy fight has the potential to spark broader policy discourse around corporate governance, proxy advisory influence, and the rights of activist shareholders. As such battles become more frequent and contentious, they raise complex questions about how the governance ecosystem should evolve to ensure fairness, stability, and accountability.
One immediate policy concern is the increasing power wielded by proxy advisory firms like ISS, Glass Lewis, and Egan-Jones. These firms play a significant role in shaping shareholder behavior, particularly among institutional investors. Critics, including some lawmakers, argue that their influence may lack sufficient transparency or accountability. “Proxy firms are becoming de facto arbiters of corporate leadership, but without the regulatory scrutiny commensurate with that power,” warned Senator Thom Tillis (R-NC) during a 2023 Senate Banking Committee hearing.
In response, policymakers could consider revising SEC regulations to mandate enhanced disclosure and conflict-of-interest guidelines for proxy advisors. The SEC has already taken modest steps in this direction—such as a 2020 rule requiring more transparent methodology—but the Harley-Davidson case may intensify calls for further reform.
Additionally, the case highlights the unresolved tension between the rights of long-term versus short-term shareholders. H Partners’ argument hinges on current underperformance and strategic missteps, while Harley-Davidson’s board stresses continuity and the forthcoming CEO transition. This dichotomy illustrates the policy dilemma: how to empower shareholder oversight without enabling disruption that undermines long-term strategy. Future legislation might explore differentiated voting rights or governance models that weight votes by tenure of shareholding.
Moreover, the rise in proxy battles is prompting legal scholars and think tanks to revisit the very concept of fiduciary duty. Traditionally understood as a board’s obligation to maximize shareholder value, fiduciary responsibility may increasingly need to include broader metrics—like sustainability, reputational risk, and employee welfare. “Shareholder primacy is being redefined in real time, and the law needs to catch up,” argued Lisa Fairfax, a professor at the University of Pennsylvania Law School.
Looking forward, if H Partners prevails, more activists may be emboldened to launch campaigns against other legacy companies. Conversely, a defeat could signal stronger insulation for boards, particularly during CEO succession periods. Either outcome may shape corporate America’s response to shareholder unrest for years to come.
Conclusion
The Harley-Davidson proxy battle encapsulates the enduring tension between entrenched corporate governance and the disruptive force of shareholder activism. It poses a central question at the heart of modern corporate law: Who ultimately governs the corporation—the board, or the shareholders?
At its core, this confrontation reflects diverging views on performance, accountability, and strategic vision. H Partners, invoking its fiduciary concern as a major investor, argues that Harley-Davidson’s leadership has failed to deliver value and must be held accountable. The company, in turn, contends that the activist campaign is ill-timed and destabilizing, particularly as it navigates a critical CEO transition. Both perspectives hold merit, and together they illustrate the increasingly nuanced terrain of corporate governance.
This battle is more than a shareholder skirmish; it is emblematic of shifting norms. Shareholders today—particularly activist investors—expect not just returns, but influence. And they now possess the tools, from social media to proxy advisory backing, to challenge even the most iconic companies. Meanwhile, boards must reconcile these demands with strategic continuity and long-term vision.
“We are entering an era where governance structures will be stress-tested not only by performance metrics, but by how inclusive and responsive they are to evolving shareholder expectations,” said Professor Jill Fisch of the University of Pennsylvania Carey Law School.
Importantly, this proxy contest also acts as a litmus test for the power and influence of proxy advisors. The split among ISS, Glass Lewis, and Egan-Jones reveals the subjective nature of governance evaluations, and may prompt greater scrutiny of how these firms derive their recommendations. As their clout increases, so too does the call for regulatory oversight and standardization.
Ultimately, whether H Partners succeeds or fails at the annual meeting, the ramifications will be long-lasting. A successful shake-up could spark a new wave of shareholder activism across legacy firms. A loss, conversely, may reaffirm the protective mechanisms that shield boards during sensitive transitional periods.
The Harley-Davidson case leaves the legal and policy community with an unresolved but pressing question: how can corporate governance frameworks adapt to an environment of intensifying shareholder demands without undermining stability or long-term vision?
“This is less a referendum on one board, and more a reflection of systemic change in how power is exercised in the modern American corporation,” concluded Professor Robert Jackson Jr., former SEC commissioner.
For Further Reading:
- “Harley-Davidson Faces Board Fight From H Partners Amid Calls for CEO to Exit Soon” – Reuters
https://www.reuters.com/business/autos-transportation/investment-firm-h-partners-prepares-fight-harley-davidson-wsj-reports-2025-04-16/ - “Harley-Davidson accuses activist shareholder of putting the company’s future at risk” – MarketWatch
https://www.marketwatch.com/story/harley-davidsons-latest-roadblock-an-activist-shareholder-who-wants-to-oust-its-ceo-a28b50d4 - “Harley-Davidson in chaos as investor slams CEO for ‘destruction’ of iconic brand and calls for two more people to resign” – The Sun
https://www.the-sun.com/motors/14043910/harley-davidson-investors-ceo-zeitz-resign/ - “Harley-Davidson: Proxy adviser opposes effort to oust Zeitz” – Milwaukee Business Journal
https://www.bizjournals.com/milwaukee/news/2025/05/06/iss-supports-maintaining-harley-board-zeitz.html - “Harley-Davidson Proxy Fight Ends With a Whimper” – The Motley Fool
https://www.fool.com/investing/2020/04/03/harley-davidson-proxy-fight-ends-with-a-whimper.aspx