Jonathan Root
HARLEY-DAVIDSONAbout Jonathan Root
Jonathan Root is Harley-Davidson’s Chief Financial Officer (since June 26, 2023) and President, Commercial (since January 27, 2025), with approximately 14 years at the company and 25+ years of finance experience; he is 51 years old . Company performance under his finance leadership included a 2024 STIP outcome of 0% (operating income and retail sales below threshold), and the 2022–2024 PSU cycle paying 90% of target after a +10% TSR modifier, with Harley-Davidson’s cumulative TSR at -11.6% (ranked 2nd of 6 peers) . HDFS delivered 2024 revenue of $1.0B (+9% YoY) and operating income of $248M (+6% YoY), while HDMC operating expenses decreased by $28M and productivity savings reached $257M to date .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Harley-Davidson Financial Services (HDFS) | Senior Vice President | Apr 2020 – Jun 2023 | Senior leadership of HDFS, supporting segment revenue and profitability |
| Harley-Davidson Financial Services (HDFS) | Vice President, Insurance & Protection Products | 2015 – 2020 | Led insurance and protection product portfolio within HDFS |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $503,000 | $575,000 |
| Target STIP % of Base | 85% | 85% |
| Target STIP ($) | $427,550 (85% of 2023 salary) | $488,750 |
| Actual STIP Paid ($) | $249,689 | $0 |
| All Other Compensation ($) | $51,462 | $49,938 |
| Total Compensation ($) | $1,294,626 | $1,582,289 |
Performance Compensation
2024 STIP Design and Outcome
| Measure | Weight | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|---|
| Combined HDMC + HDFS Operating Income ($mm) | 80% | 660.0 | 825.0 | 990.0 | 526.0 | 0% |
| Core Units Retail YoY Growth | 20% | 2.5% | 5.0% | 7.3% | -2.9% | 0% |
2024 Long-Term Incentive (PSUs and RSUs)
| Award Type | Grant Date | Target Shares | Max Shares | Grant-Date Fair Value ($) |
|---|---|---|---|---|
| PSUs (2024–2026 cycle) | 02/05/2024 | 14,256 | 28,512 | $508,226 |
| PSUs (2023 award tranche for 2024) | 02/05/2024 | 1,778 | 3,556 | $58,034 |
| PSUs (2022 award tranche for 2024) | 02/05/2024 | 1,962 | 3,924 | $69,062 |
| RSUs (time-vesting) | 02/05/2024 | 9,505 | — | $322,029 |
Performance measures and TSR modifier (2024–2026 cycle):
- HDMC ROIC (50%) and HDMC Revenue (50%), with a TSR modifier of +/-15% versus BRP, Brunswick, Polaris, Thor, Winnebago .
- 2022–2024 PSU cycle paid at 90% of target after a +10% TSR modifier; Harley-Davidson cumulative TSR -11.6%, rank 2/6 .
Earned/Retirement Values and Termination Vesting
| Award | Retirement Value ($) | Notes |
|---|---|---|
| 2022–2024 PSU | $177,345 | Vests pro-rata upon retirement per post-2019 rules |
| 2023–2025 PSU | $160,683 | Vests pro-rata upon retirement per plan |
| 2024–2026 PSU | $429,563 | Vests pro-rata upon retirement per plan |
| Death/Disability (RSUs/RSU-equivalents) | $258,093 | Value at $30.13/share on 12/31/24 |
Equity Ownership & Alignment
Beneficial Ownership (as of March 6, 2025)
| Item | Amount |
|---|---|
| Shares owned | 36,697 |
| Percent of class | <1% |
| RSUs (not included in “Shares owned”) | 37,464 |
Outstanding Equity Awards (as of December 31, 2024)
| Item | Quantity | Market/Value Basis |
|---|---|---|
| Options – Exercisable | 1,814 @ $63.49 strike, exp. 02/03/2025 | — |
| Unvested RSUs / earned PS | 18,483 units; market value $556,893 | Based on 12/31/24 close |
| Unearned PSUs/AIP PS | 43,089 units; payout value $1,298,272 | Target/threshold basis at $30.13 |
Scheduled Vesting (awards granted 2022–2024)
| Vesting Date | RSUs & Earned PS | Unearned PS & AIP PS |
|---|---|---|
| Feb 2025 | 10,960 | — |
| Feb 2026 | 4,354 | 4,890 |
| Feb 2027 | 3,169 | 8,199 |
| AIP Performance Shares | — | 30,000 (share-price thresholds by Dec 31, 2025; 50% vests on threshold, remaining 50% one year later) |
Stock ownership guidelines and alignment:
- Senior Executive Leaders (including NEOs) must hold stock equal to 3x base salary; five-year phase-in; as of 12/31/24, CEO met guideline and other NEOs had additional time to meet requirements .
- Hedging and pledging of company stock are prohibited, enhancing alignment; option repricing is prohibited .
Employment Terms
Executive Severance (Termination without Cause, absent Change of Control)
| Item | Amount ($) |
|---|---|
| Salary Continuation (24 months) | $1,150,000 |
| Health & Welfare | $49,010 |
| Continuation of Life Insurance | $2,281 |
| Payment in lieu of outplacement | $10,000 |
| Total | $1,211,291 |
Key terms:
- Provides 24 months of base salary continuation, prorated annual incentive payment, lump-sum medical/dental/vision based on severance months, and outplacement; requires a general release and restrictive covenants .
Change-of-Control (Transition Agreement; double-trigger)
| Item | Amount ($) |
|---|---|
| Cash Severance | $2,127,500 |
| Interrupted Bonus | $488,750 |
| Health & Welfare | $52,792 |
| Equity (unvested) – Long-term performance shares | $607,284 |
| Equity (unvested) – Restricted Stock | $409,582 |
| Total (Unearned + Benefits) | $3,725,908 |
Key terms:
- No immediate vesting of equity awards upon change of control for NEOs party to Transition Agreements; vesting requires termination following CoC (double-trigger) .
- No excise tax gross-up; 280G cutback or full payment based on higher after-tax outcome to the executive .
Performance Compensation Details
PSU Performance Measures (2024–2026)
| Measure | Weighting | Definition |
|---|---|---|
| HDMC ROIC | 50% | 3-year average ROIC (OIAT/Invested Capital) |
| HDMC Revenue | 50% | Sum of HDMC revenue over the 3-year period |
| TSR Modifier | +/-15% | 3-year relative TSR vs BRP, Brunswick, Polaris, Thor, Winnebago |
2022–2024 PSU Results
| Measure | Weight | 2022 | 2023 | 2024 | Achievement % | TSR Modifier | Final Payout as % of Target |
|---|---|---|---|---|---|---|---|
| ROIC | 25% | 21.0% | 17.5% | 0% | 12.8% | +10% | 90.0% |
| Revenue | 25% | 24.9% | 20.6% | 19.9% | 21.8% | — | — |
| HDI Employee Engagement | 25% | 31.0% | 20.8% | 27.1% | 26.3% | — | — |
| HDI Workforce Representation | 25% | 50.0% | 0% | 12.6% | 20.9% | — | — |
Governance and Shareholder Engagement
- CFO participated directly in shareholder engagement in 2024 (14 meetings with holders representing >70% of shares outstanding) focused on compensation design feedback .
- Human Resources Committee members: Maryrose Sylvester (Chair), Jared D. Dourdeville, Sara Levinson, Norman Thomas Linebarger; all independent; four meetings in 2024 .
- Clawback policy maintained; double-trigger vesting on LTIs; no employment contracts; anti-hedging/pledging; no option repricing, reflecting strong compensation governance .
Investment Implications
- Alignment and pay-for-performance: 2024 STIP paid 0% for all NEOs (including Root), evidencing discipline when financial thresholds are missed; 2022–2024 PSU paid at 90% after TSR modifier, tying long-term equity outcomes to ROIC/revenue/TSR performance .
- Vesting and potential selling pressure: Notable scheduled RSU/earned PS vesting in Feb 2025/2026/2027 and potential AIP performance share vesting tied to share-price thresholds by Dec 31, 2025 (50% immediate on threshold, 50% a year later), which could create episodic supply if awards settle .
- Ownership and alignment: Direct ownership is <1% of shares outstanding with substantial unvested equity; Root is subject to 3x salary ownership guidelines and to anti-hedging/pledging bans, mitigating misalignment risks .
- Change-of-control economics: Double-trigger structure with no excise tax gross-up and a modest cash severance ($2.13M) plus equity acceleration under CoC termination demonstrates balanced retention protection without shareholder-unfriendly provisions .
- Execution focus: Company operational highlights (HDFS growth and cost productivity) and rigorous incentive metrics (HDMC ROIC and Revenue with TSR modifier) suggest Root’s compensation levers are concentrated on profitability, capital efficiency, and top-line growth—key drivers for value creation and investor confidence .