Harley-Davidson Down, CEO Earnings Up
The last quarter of 2009 brought about financial turmoil for Harley-Davidson Inc., as the iconic American motorcycle brand reported its first quarterly loss in 16 years.
The deficit: $218.7 million. A massive number in any industry, but it didn’t stop the Motor Company’s CEO from receiving an incredible pay package during his first eight months on the new job.
Keith E. Wandell’s pay package? $6.4 million, which reportedly included a base salary of $650,025 from his start day of May 1 through the end of 2009, a bonus of $780,030 and stock and option awards valued at $4.9 million. It was reported that Wandell also received other compensation worth $22,515, which includes a cash payment of $19,733 instead of perquisites.
And this money landed in Wandell’s pocket after the Motorcycle Industry Council reported that 2009 sales were down 40.8 percent from the 2008 season (an estimated 520,502 bikes were sold in 2009 compared to 880,000 in 2008).
Not too shabby for the man in charge during these dire economic times, considering H-D has been in the spotlight lately, laying off workers, and closing dealerships and factories. And don’t forget the termination of the Motor Company’s subsidiary Buell last October, and the company looking to sell MV Augusta, the Italian brand Harley-Davidson purchased in July 2008 for $109 million.
These facts combined with Wandell’s pay will likely cause alarm across the motorcycle industry, especially after all the dismal news that recently occurred in the auto industry.
And Harley enthusiasts may also question the company’s overall decision regarding the selection of Wandell, considering the major decision maker’s lack of experience in the industry. Harley’s former CEO, Jim Ziemer, spent 40 years working with the company before taking the position he held for four years; before Wandell landed the position, he was the chief operating officer at Johnson Controls Inc., a company he worked at for 21 years that makes car battery and building ventilation systems.
And if that isn’t enough to create haggling within the industry, it should be noted that Wandell reportedly didn’t own a motorcycle when he took over as CEO of one of the industry’s largest brands…but he did ride a bit when he was younger.