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(Reuters) - Harley-Davidson Inc HOG.N said on Monday it settled a board fight with Impala Asset Management just days after the investor began pressing to replace two directors at America's oldest and best-known motorcycle maker.
An independent director, mutually agreed on by Impala and Harley, will join the board after the company’s annual meeting, which was held in May last year, and before July 31.
Impala, which owns roughly 2% of Harley’s stock, nominated two directors two weeks ago as the $2.8 billion hedge fund wanted the iconic American brand to return to its roots after focusing on electric motorcycles and concentrate on its core riders. It had criticized the company for losing market share and for being slow to fix poor returns. In January it pushed for the ouster of Chief Executive Matt Levatich. He resigned in February after five years as CEO during which the company lost more than half of its value.
On Monday, the two sides cast aside some differences as the coronavirus outbreak makes it tougher for companies to stay in business and falling stock prices are hurting many investors.
Harley and Impala entered the “agreement in the spirit of cooperation during trying times, viewing it as a necessity to move forward,” the company said in a regulatory filing.
The $2.7 billion company’s stock fell 4.38% on Monday to $17.02, having tumbled some 50% since the start of the year.
Two weeks ago Impala nominated former auto industry executive Brent Dewar and Leo Hindery, Jr., who has public board experience, as directors to Harley’s nine member board.
Now neither will be considered for the board seat, according to the agreement. Impala will not be allowed to suggest someone working for the fund for the board seat.
Impala is run by former Soros Fund Management Chief Investment Officer Robert Bishop.
At the end of February Harley tapped long-time board member Jochen Zeitz as interim CEO but the investment fund has criticized his compensation package of as much as $8.5 million.
Zeitz, a former CEO of German apparel and footwear maker Puma, has led a push for sustainability at Harley and was a force behind The Live Wire, the company’s first production of an electric bike.
(This story corrects second paragraph to say “mutually agreed upon” director instead of Impala representative.)
Reporting by Svea Herbst-Bayliss and Sanjana Shivdas in Bengaluru; Editing by Anil D’Silva and Richard Chang
