Two senior Harley-Davidson executives, including new CEO and president Jochen Zeitz have bought up millions of dollars of company shares.
The move follows the recent announcement of first-quarter results earnings which revealed a global 17.7% drop to 40,430 motorcycle sales, 20.5% crash in overseas sales (16,707) and a 15.5% domestic slide (23,732).
Harley shares have dropped 48.6% this year.
Jochen was announced as CEO on 8 May 2020 after becoming interim CEO when former CEO Matt Levatich was sacked in February. Since then, stock has slid another 37.2%.
On May 5, senior VP and CFO John A. Olin bought 13,500 shares of HOG stock at the average price of $19.02 for a total of $256,770.
The day after being announced CEO, Jochen paid $US2.1 million for 97,850 Harley-Davidson shares at an average per-share price of $21.26.
Since then the stock has bobbled around and closed on Wall St at $US19.66.
These are the first such purchases of share by a Harley-Davidson insider since 2017.
Jochen also converted the 3.7 million share units he was awarded from his service as a director into the equivalent amount of stock.
He now owns 100,450 Harley-Davidson shares in a personal account, along with 225,403 restricted stock units and 22,612 share units.
The stock purchase is his first open-market buy since joining the company’s board in 2007.
There is no statement from Harley about the share purchases and no record of Jochen’s salary.
However, the previous boss was paid a record $11m last year.
When he became interim CEO, Jochen implemented measures to ride out the pandemic recession including he and fellow board members forgoing salary/cash compensation.
The measures also include cutting back on all non-essential spending, temporary salary reductions, 30% reduction in executive leadership, 10-20% reduction for US salaried employees, no merit increases for 2020 and no new staff until further notice.
Jochen is also implementing his plan five-year strategy which he calls “Rewire”.
It involves expanding “profitable iconic heritage bikes” while committing to branching out to adventure touring, the new Streetfighter range and electric motorcycles.
However, last week he delayed the August 2020 launch of the new an America adventure bike and water-cooled Bronx streetfighter until next year.
It will be interesting to see what the market makes of the bosses’ stock buyout. It certainly shows confidence in the company’s future.
Together with the five-year plan, it also shows this is not a clever get-rich-quick manoeuvre to buy at the bottom of the market.