Zeitz said the move would make 4,500 employees of the Milwaukee, Wisconsin-based company more aligned with executives and shareholders. While KKR is not an investor in Harley-Davidson, he said he worked on the plan after meeting Stavros, who has been spearheading a similar initiative at his private equity firm.
“We wanted to align our expectations with those of our shareholders and include our hourly and factory workers,” Zeitz, who took charge of the 118 year-old motorcycle company last year, said in an interview.
About 20,000 non-management employees have been awarded more than $500 million worth of stock across eight industrial companies owned by KKR, including New Jersey-based drug capsule maker Capsugel and Ingersoll Rand Inc, a Denver-based producer of pumps and compressors.
“In industrial firms the majority of the workforce tend to have low levels of income and low levels of engagement, but they are critical to your success,” said Stavros, who co-heads KKR’s private equity business in the Americas.
Harley-Davidson unveiled the employee stock program as part of a 2021-2025 strategic plan to bolster earnings growth and profitability.
Earlier on Tuesday, the company said its revenue fell 32% to $725 million in the fourth quarter, as motorcycle shipments almost halved. It also reported a net loss of $96 million, as retail motorcycle sales in the United States - the company’s biggest market - fell for the 16th straight quarter. Reporting by Chibuike Oguh in New York; Editing by David Gregorio