UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.    )

Harley-Davidson, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Notes:

Reg. (S) 240.14a-101.

SEC 1913 (3-99)

NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

		Harley-Davidson, Inc. 3700 West Juneau Avenue Milwaukee, Wisconsin 53208 (414) 342-4680
March 29, 2018

NOTICE OF ANNUAL MEETING

AND PROXY STATEMENT

Dear Fellow Shareholder:

On behalf of the Board of Directors and management of Harley-Davidson, Inc., we invite you to attend the 2018 Annual Meeting of Shareholders to be held at 3:00 p.m., Central Daylight Time, on Thursday, May 10, 2018, at the Harley-Davidson Museum, 400 West Canal Street, Milwaukee, Wisconsin.

The accompanying Notice of Annual Meeting of Shareholders and Proxy Statement describe the formal business that the shareholders will transact at the Annual Meeting. During the Annual Meeting, there will also be brief reports on operations. When the business of the Annual Meeting is concluded, shareholders will have an opportunity to ask questions.

We are furnishing proxy materials to our shareholders via the internet. This process expedites the delivery of proxy materials, ensures that proxy materials remain easily accessible to shareholders and provides clear instructions for receiving materials and voting.

On March 29, 2018, we mailed our Notice of Internet Availability of Proxy Materials, which contains instructions for use of this process, including how to access our Proxy Statement and 2017 Annual Report on Form 10-K and how to vote via the internet, mail or telephone, or in person at our 2018 Annual Meeting of Shareholders. The Notice of Internet Availability of Proxy Materials contains instructions on how you may receive a printed copy of the Proxy Statement and 2017 Annual Report on Form 10-K.

We sincerely hope you will be able to attend our Annual Meeting. However, whether or not you are personally present, it is important that you vote your shares.

If you own shares through a broker, bank or other nominee, please vote your shares by providing your broker, bank or nominee with your voting instructions.

Thank you for your ongoing support of Harley-Davidson, Inc.

Sincerely yours,

Michael J. Cave Chairman of the Board		Matthew S. Levatich President and Chief Executive Officer

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Notice of Annual Meeting of Shareholders

May 10, 2018

The 2018 Annual Meeting of Shareholders of Harley-Davidson, Inc. will be held at the Harley-Davidson Museum, 400 West Canal Street, Milwaukee, Wisconsin, on Thursday, May 10, 2018, at 3:00 p.m., Central Daylight Time, to vote on the items listed below.

HOW TO VOTE YOUR SHARES:       March 8, 2018 is the record date for determining shareholders entitled to notice of and to vote at the 2018 Annual Meeting and any adjournments or postponements of that meeting. If you held your shares as of the close of business on March 8, 2018, you can vote using one of the following methods:
		INTERNET You can vote your shares online at www.proxyvote.com.
		TELEPHONE In the U.S. or Canada, you can vote your shares toll-free. Check your proxy card or voting instruction form for the toll-free number.
		MAIL You can vote by mail by marking, dating, and signing your proxy card or voting instruction form and returning it in the postage-paid envelope provided.
		IN PERSON If you plan to vote in person at the meeting, you will need to request a ballot to vote your shares. In addition, if you own your shares through a bank, broker or other nominee, you will need to obtain a legal proxy issued in your name from your bank, broker or other nominee to vote at the meeting.

We urge you to submit your proxy as soon as possible. If the records of our transfer agent show that you own shares in your name or if you own shares through our Dividend Reinvestment Plan at the close of business on March 8, 2018, then you may vote (1) via the internet at http://www.proxyvote.com, (2) in person at the Annual Meeting, (3) by mail after first requesting a printed copy of the Proxy Statement, proxy card and Annual Report on Form 10-K and following the instructions set forth on the proxy card or (4) by telephone after reviewing the Proxy Statement and Annual Report on Form 10-K at http://www.proxyvote.com.

If you own shares in street name, we encourage you to provide voting instructions to your bank, broker or other nominee. Street name holders may also vote via telephone or the internet if their bank, broker or other nominee makes those methods available, in which case the bank, broker or other nominee will enclose the instructions along with this Proxy Statement.

By Order of the Board of Directors,

Harley-Davidson, Inc.

Stephen W. Boettinger

Assistant Secretary

Milwaukee, Wisconsin

March 29, 2018

PROXY SUMMARY

PROXY SUMMARY

This overview provides information that you should consider before voting on the items presented at this year’s Annual Meeting of Shareholders. This overview does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.

				Item 1 To elect ten directors to the Board of Directors Our Board unanimously recommends that you vote “FOR” the election of all director nominees.

Director Nominees

Age

Director Since

Independent

Other Public Directorships

Board Committees

AFC

HRC

NCGC

SC

Troy Alstead Founder & CEO of Ocean5 and Table 47 Former COO & Former CFO of Starbucks Corp.

54

2017

x

Levi Strauss & Co. (1)

x

R. John Anderson Retired Chief Executive Officer of Levi Strauss & Co.

67

2010

x

x

x

x

Michael J. Cave Chairman of the Board Retired Senior Vice President of The Boeing Company

57

2012

x

Aircastle Limited Ball Corporation Esterline Technologies Corporation

x

Allan Golston President, United States Program for the Bill & Melinda Gates Foundation

51

2017

x

Stryker Corporation

x

x

Matthew S. Levatich President and Chief Executive Officer, Harley-Davidson, Inc.

53

2015

Emerson Electric Co.

Sara L. Levinson Co-founder and Director, Katapult, Inc. Former President of NFL Properties, Inc.

67

1996

x

Macy’s, Inc.

x

x

x

N. Thomas Linebarger Chairman and Chief Executive Officer, Cummins Inc.

55

2008

x

Cummins Inc.

x

x

Brian R. Niccol Chief Executive Officer, Chipotle, Inc.

44

2016

x

Chipotle, Inc.

x

x

x

Maryrose T. Sylvester President and Chief Executive Officer, Current by GE

52

2016

x

x

x

Jochen Zeitz Co-Founder and Executive Chairman of B Team Former CEO & CFO of PUMA

54

2007

x

Wilderness Holdings Limited (2)

x

x

 - Member and Committee Chair

X - Member

PROXY SUMMARY

				Item 2 To approve, by advisory vote, the compensation of our named executive officers Our Board unanimously recommends that you vote “FOR” this proposal.

STRENGTHENING THE LINK BETWEEN PAY AND PERFORMANCE

Beginning in 2016 and continuing for 2018, we moved to further strengthen the link between compensation and performance. In 2016, we modified several elements of our executive compensation program by increasing the amount of compensation that is classified as performance-based and reconfigured our long-term incentive plan to better align long-term executive rewards with long-term shareholder value. Examples include eliminating the use of stock options and our cash-based long-term incentives and introducing performance shares, which only create value to the executive when, at a minimum, we attain threshold performance over a three-year performance period. Currently, each named executive officer receives 67% of their long-term incentive award in the form of performance shares. For 2017, we set the maximum payout under the performance share awards at 200% of target rather than the maximum 300% of target that we used in 2016.

				Item 3 To approve the Amended and Restated Harley-Davidson, Inc. Director Stock Plan. Our Board unanimously recommends a vote “FOR” approval of the Amended and Restated Harley-Davidson, Inc. Director Stock Plan.

We are asking shareholders to approve the Amended and Restated Harley-Davidson, Inc. Director Stock Plan (the “Amended Director Stock Plan”), which is an amended and restated version of the Harley-Davidson, Inc. Director Stock Plan, as amended and restated effective December 1, 2014 (the “Current Director Stock Plan”). The Board approved the Amended Director Stock Plan on February 2, 2018, subject to shareholder approval.

The Amended Director Stock Plan includes the following principal amendments to the Current Director Stock Plan:

PROXY SUMMARY

				Item 4 To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018. Our Board unanimously recommends a vote “FOR” ratifying the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018.

TABLE OF CONTENTS

TABLE OF CONTENTS

PROXY STATEMENT

		PROXY STATEMENT   3700 West Juneau Avenue Milwaukee, Wisconsin 53208

March 29, 2018

The Board of Directors of Harley-Davidson, Inc. requests the proxy accompanying this Proxy Statement for use at the 2018 Annual Meeting of Shareholders to be held at the Harley-Davidson Museum, 400 West Canal Street, Milwaukee, Wisconsin, on Thursday, May 10, 2018 at 3:00 p.m., Central Daylight Time, and at any adjournment or postponement of that meeting (the “Annual Meeting”).

We first mailed the Notice of Internet Availability of Proxy Materials to shareholders on March 29, 2018. The Notice of Internet Availability of Proxy Materials instructs shareholders and beneficial owners of our Common Stock on how they may access our proxy materials, which include our Proxy Statement and 2017 Annual Report on Form 10-K, via the internet. You will not receive a printed copy of the proxy materials unless you request to receive these materials by following the instructions we provide later in this Proxy Statement and in the Notice of Internet Availability of Proxy Materials. Instead, the Notice of Internet Availability of Proxy Materials will instruct you on how you may access and review all of the important information contained in the proxy materials. The Notice of Internet Availability of Proxy Materials also instructs how you may submit your proxy via the internet, mail or telephone, or in person at the Annual Meeting. If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions we provide later in this Proxy Statement.

As used in this Proxy Statement, “we,” “our,” the “company” or “Harley-Davidson” refers to Harley-Davidson, Inc. We operate in two business segments: the motorcycles and related products segment and the financial services segment. “HDMC” refers to our motorcycles and related products segment subsidiaries, which include the companies that do business as “Harley-Davidson Motor Company.” “HDFS” generally refers to our financial services segment subsidiary, which includes Harley-Davidson Financial Services, Inc. and its subsidiaries.

PROPOSALS TO BE VOTED ON

PROPOSALS TO BE VOTED ON

PROPOSAL 1: ELECTION OF DIRECTORS

Shareholders will elect ten directors at the 2018 Annual Meeting. We have significantly refreshed our Board of Directors since the 2016 annual meeting of shareholders. Four of the director nominees – Ms. Sylvester and Messrs. Alstead, Golston and Niccol – became directors after the 2016 annual meeting of shareholders and before the 2017 annual meeting of shareholders.

Our Restated Articles of Incorporation provide for a Board of Directors that has between six and fifteen members. The Board determines the size from time to time by the vote of a majority of the current directors. The entire Board is elected annually. The Board currently consists of ten members with terms that expire at the Annual Meeting.

Our By-laws have a majority vote standard for the election of directors. Because this is an uncontested election, the number of votes cast favoring each director nominee’s election must exceed 50% of the total number of votes cast with respect to that nominee’s election, including any votes withheld, for shareholders to elect the nominee. Any shares not voted, whether due to abstentions or broker non-votes, will not have an impact on the election of directors.

Unless you specify otherwise in your proxy, the persons you appointed will vote your shares “FOR” the Board of Directors’ nominees that we name below. If any nominee becomes unable to serve, the persons you appointed may vote your shares for another person that the Board designates.

		THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE FOLLOWING TEN NOMINEES OF THE BOARD OF DIRECTORS.

PROPOSALS TO BE VOTED ON

BIOGRAPHICAL INFORMATION, SKILLS AND QUALIFICATIONS

Summary of 2018 Director Skills, Qualifications, and Experience

The Board believes that all of the directors are highly qualified and have specific employment and leadership experiences, qualifications, and skills that qualify them for service on the Board, including significant experience leading business strategy. Our directors have diverse backgrounds, experience and board tenure, and possess many different and valuable skills and qualifications. This all supports the Board’s responsibility to drive strategy, assess performance, and engage with and challenge management.

Below is a matrix and definition of the experience, skills and qualifications the Board has identified as important for determining whether each nominee should serve on the Board in light of the company’s business and strategic direction. The matrix identifies the skills and qualifications that each director possesses. The section just below the matrix defines each of the skills and qualifications and describes why each skill and qualification is important. The biographies for each director describe in more detail the relevant experience, qualifications, attributes and skills of the director.

DIRECTOR TENURE:		DIRECTOR AGE:		DIRECTOR GENDER & RACE:

SUMMARY OF 2018 DIRECTOR DIVERSITY

Nominees of the Board of Directors

PROPOSALS TO BE VOTED ON

PROPOSALS TO BE VOTED ON

PROPOSALS TO BE VOTED ON

PROPOSALS TO BE VOTED ON

PROPOSALS TO BE VOTED ON

PROPOSAL 2: APPROVAL, BY ADVISORY VOTE, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

Our shareholders may approve, on a non-binding, advisory basis, our named executive officer (“NEO”) compensation as disclosed in accordance with the executive compensation disclosure rules contained in Item 402 of SEC Regulation S-K. Accordingly, we are seeking input from shareholders with this advisory vote on the compensation of our NEOs. The vote on this proposal is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our NEOs as disclosed in the “Compensation Discussion and Analysis” section and the accompanying executive compensation tables and narrative discussion contained in this Proxy Statement. The company asks that you support the compensation of our NEOs as so disclosed. Because your vote is advisory, it will not be binding on the Human Resources Committee, the Board or the company. However, the HR Committee will review the voting results and consider them when making future decisions regarding executive compensation.

We describe the individual elements that make up our total compensation more fully in the “Compensation Discussion and Analysis” section of this Proxy Statement. We believe our executive compensation programs are structured to best support our company and our business objectives.

PROPOSALS TO BE VOTED ON

Accordingly, for the reasons we discuss above, the Board recommends that shareholders vote in favor of the compensation of our NEOs as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.

The votes cast “for” this proposal must exceed the votes cast “against” this proposal for approval of the compensation of our NEOs, assuming that a quorum is present. For purposes of determining the vote regarding this proposal, abstentions and broker non-votes do not constitute a vote “for” or “against” the proposal and will be disregarded in the calculation of “votes cast.” Proxies solicited by the Board will be voted “FOR” approval of the compensation unless a shareholder specifies otherwise.

		THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THE COMPENSATION DISCUSSION AND ANALYSIS SECTION AND THE ACCOMPANYING COMPENSATION TABLES AND NARRATIVE DISCUSSION CONTAINED IN THIS PROXY STATEMENT.

PROPOSALS TO BE VOTED ON

PROPOSAL 3: APPROVAL OF THE AMENDED AND RESTATED HARLEY-DAVIDSON, INC. DIRECTOR STOCK PLAN

We are seeking shareholder approval of the Amended Director Stock Plan, which is an amended and restated version of the Current Director Stock Plan. The Board approved the Amended Director Stock Plan on February 2, 2018, subject to shareholder approval.

Summary of Proposal. The Harley-Davidson, Inc. Director Stock Plan was last approved by shareholders at the 2010 annual meeting of shareholders (the “2010 Plan”). The 2010 Plan was subsequently amended and restated by the Current Director Stock Plan. We are asking shareholders to approve the Amended Director Stock Plan, which includes the following principal amendments to the Current Director Stock Plan:

Description of the Amended Director Stock Plan

The following is a summary of the principal features of the Amended Director Stock Plan and, where indicated, any material differences from the Current Director Stock Plan. The following summary description is qualified in its entirety by reference to the full text of the Amended Director Stock Plan, which is attached to this Proxy Statement as Appendix A.

Purpose. The Amended Director Stock Plan provides compensation to nonemployee directors in the form of company common stock or in share units. Each share unit represents the right to receive one share of company common stock and therefore has the value of one share of company common stock. Such compensation should provide an increased incentive for nonemployee directors to contribute to the future success and prosperity of the company. The Board believes this will, in turn, enhance the value of the stock for the benefit of the shareholders and increase the ability of the company to attract and retain directors of exceptional skill upon whom, in large measure, its sustained growth and profitability depend. This purpose is consistent with our stock ownership guidelines applicable to directors which stipulate that all directors hold five times their annual retainer in shares of common stock.

Administration. The Nominating and Corporate Governance Committee administers the Amended Director Stock Plan.

Eligibility. Nonemployee members of the Board of Directors (and no other persons) are eligible to participate in the Amended Director Stock Plan. We currently have nine nonemployee directors who are eligible to participate in the Amended Director Stock Plan.

Shares Subject to the Plan. When shareholders approved the Current Stock Plan, the plan allowed us to issue 300,000 shares of common stock (subject to adjustment as provided in the Current Director Stock Plan). As of March 8, 2018, only 33,466 shares remained available for issuance under the Current Director Stock Plan because 266,534 shares have been issued since shareholders approved it. If shareholders approve the Amended Director Stock Plan at the Annual Meeting, they would be approving an increase in the number of shares of our common stock available for issuance by 316,534 shares, resulting in 350,000 shares available for issuance after that approval (subject to adjustment as provided in the Amended Director Stock Plan).

Share Unit Grants. Under the Amended Director Stock Plan, each nonemployee director will, as of the first business day following each annual meeting of shareholders, receive a grant of such number of share units as the Board determines. All grants of share units immediately vest in full on the date of grant. Any person who is first elected as a nonemployee director at a time other than at an annual meeting of shareholders will automatically be granted, as of the first business day following the first meeting of the Board or a committee of the Board that the director attends, a number of share units equal to the number of share units last granted to each of the other nonemployee directors. All payments in respect of share units will be made in shares of company common stock by converting share units into company common stock on a one-for-one basis. However, if shares of company common stock are not available for delivery, all or part of the payment may be made in cash, in which case the cash payment will be determined by multiplying the number of share units to be paid by the fair market value of a share of company common stock on the last business day prior to the date payment is made. Any payment of a fractional share unit will likewise be determined by multiplying the fractional share unit by the fair market value of a share of company common stock on the last business day prior to the date payment is made. In connection with the 2017 annual meeting of shareholders, the Board approved a grant of share units to each nonemployee director valued at $125,000, which resulted in grants of approximately 2,800 share units to each director.

PROPOSALS TO BE VOTED ON

Annual Compensation Limit. If shareholders approve this proposal, a nonemployee director’s compensation for services performed as a nonemployee director, including the value of equity awards granted under the Amended Director Stock Plan, annual retainer fees, and other cash compensation, may not exceed $1,000,000 in the aggregate in a fiscal year. The Current Director Stock Plan does not currently provide for a limit on compensation to nonemployee directors for services performed as a nonemployee director.

Share Election. A nonemployee director may elect to receive either 50% or 100% of his or her annual retainer fee in the form of company common stock, with the receipt of such shares to be in lieu of any cash payment for that portion of his or her annual retainer fee. However, if, at the time an annual retainer fee is payable, a nonemployee director satisfies the company’s stock ownership guidelines applicable to directors, through the ownership of company common stock and/or share units credited to his or her plan account, then the nonemployee director may make an election to receive 0% of such annual retainer fee in the form of company common stock. If a nonemployee director has not made an election, the director will be deemed to have made an election to receive 50% of his or her annual retainer fee in the form of company common stock. We discuss the amount of the annual retainer for 2017 below under “Narrative to Director Compensation Table” on page 52. The Company’s Director Compensation Policy provides the amounts of compensation that nonemployee directors receive under the Current Director Stock Plan and otherwise including an annual retainer. The amounts that nonemployee directors received under the Current Director Stock Plan during 2017 are set forth under “Executive Compensation—Director Compensation.”

Transfer of Shares. Subject to any deferral election, shares issuable to a nonemployee director are transferred to such director as of the first business day following each annual meeting of shareholders, except that, for a director elected to the Board at a time other than at an annual meeting of shareholders, shares are transferred to such director as of the first business day following the first meeting of the Board or a committee of the Board that the director attends. The total number of shares to be so transferred is determined by dividing the dollar amount of the annual retainer fee payable by the fair market value of a share of company common stock on the day on which the annual retainer fee is payable.

Deferral Election. Each nonemployee director may make an election to defer receiving all, 50% or none of the shares that would otherwise be transferred to such nonemployee director with respect to any annual retainer fees otherwise earned after the effective date of the election.

Transferability Restrictions. Nonemployee directors generally may not subject their right to payment under the Amended Director Stock Plan in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or garnishment.

Termination of or Change to the Amended Director Stock Plan. The Nominating and Corporate Governance Committee may from time to time, or at any time, suspend or terminate the Amended Director Stock Plan or amend the Amended Director Stock Plan in any manner without obtaining further shareholder approval.

New Plan Benefits. Only non-executive directors are entitled to receive benefits under the plan. The Board has the discretion to determine the number of share units to grant to each nonemployee director on an annual basis. Accordingly, the company cannot currently determine the number of share units that directors may receive under the Amended Director Stock Plan. In addition to annual grants of share units, the Amended Director Stock Plan entitles (and in some circumstances requires) nonemployee directors to elect to receive a portion of their annual retainer in shares of company common stock. It is possible that a director will not elect to receive any portion of his or her retainer in shares of company common stock. Further, to the extent a director makes such an election, the value that the director receives as a result of the election has the effect of reducing, on a dollar-for-dollar basis, the amount of the retainer that the director would have received in cash. Accordingly, we do not believe the opportunity to make this election under the Amended Director Stock Plan results in a determinable benefit to nonemployee directors.

Vote Requirement. The affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting is required for approval of the Amended Director Stock Plan, provided that shareholders holding a majority of the outstanding shares of our common stock cast votes on the proposal. For purposes of determining the vote regarding this proposal, abstentions and broker nonvotes will have no impact on the vote, provided that shareholders holding a majority of the outstanding shares of common stock cast votes on the proposal. Proxies solicited by the Board will be voted “FOR” approval of the Amended Director Stock Plan unless a shareholder specifies otherwise.

PROPOSALS TO BE VOTED ON

Equity Compensation Plan Information. In accordance with SEC requirements, the following table provides information about awards outstanding and shares remaining available under the Current Director Stock Plan and all of the company’s other equity compensation plans (including any individual compensation arrangements) as of December 31, 2017:

Plan documents for each of the company’s equity compensation plans have been filed with the SEC on a timely basis and are included in the list of exhibits to our annual report on Form 10-K. Equity compensation plans not submitted to shareholders for approval were adopted prior to current regulations requiring such approval and have not been materially altered since adoption.

The material features of the union employees’ stock option awards are the same as those applicable to management employees’ outstanding stock option awards. Under the company’s management and union stock option awards, stock options have an exercise price equal to the fair market value of the underlying stock at the date of grant and expire ten years from the date of grant. Stock options vest ratably over a three-year period with the first one-third of the grant becoming exercisable one year after the date of grant.

		THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE AMENDED AND RESTATED HARLEY- DAVIDSON, INC. DIRECTOR STOCK PLAN.

PROPOSALS TO BE VOTED ON

PROPOSAL 4: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Ernst & Young LLP, an independent registered public accounting firm, performed an audit of our consolidated financial statements for the fiscal year ended December 31, 2017 and the effectiveness of our internal control over financial reporting as of December 31, 2017. The Audit and Finance Committee is responsible for the appointment, compensation, retention and oversight of the independent auditors retained to audit our financial statements. The Audit and Finance Committee selected Ernst & Young LLP to serve as our independent registered public accounting firm for the 2018 fiscal year, and the committee is presenting this selection to shareholders for ratification. Ernst & Young LLP has served as our independent auditor since 1982. Representatives of Ernst & Young LLP will be present at the Annual Meeting to respond to shareholders’ questions and to make a statement, if they so desire.

If, prior to the Annual Meeting, Ernst & Young LLP declines to act as our independent registered public accounting firm or the Audit and Finance Committee does not want to use Ernst & Young LLP as our independent registered public accounting firm, the Audit and Finance Committee will appoint another independent registered public accounting firm. The Audit and Finance Committee will present any new independent registered public accounting firm for the shareholders to ratify at the Annual Meeting. If the shareholders do not ratify the engagement of Ernst & Young LLP at the Annual Meeting, then the Audit and Finance Committee will reconsider its selection of Ernst & Young LLP.

To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018, the votes cast “for” this proposal must exceed the votes cast “against” it. For purposes of determining the vote regarding this proposal, abstentions and broker non-votes (if any) do not constitute a vote “for” or “against” the proposal and will be disregarded in the calculation of “votes cast.” Unless you specify otherwise in your proxy, the persons you have appointed will vote your shares “FOR” ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018.

During the fiscal year ended December 31, 2017, we hired Ernst & Young LLP to perform the annual audit and to provide audit-related and tax services. The Audit and Finance Committee Charter requires that the Audit and Finance Committee pre-approve all Ernst & Young LLP services. The Audit and Finance Committee also pre-approved all fees that we incurred for services that Ernst & Young LLP provided. The fees we incurred for services that Ernst & Young LLP provided during the past two years are listed in the following table.

Audit fees included fees for the audit of our consolidated financial statements and our internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002. This category also includes fees for audits provided in connection with government filings or services that generally only the principal auditor can reasonably provide to a client, such as comfort letters, procedures related to debt financing, consents and reviews of documents that we file with the SEC. Audit-related services included audits of employee benefit plans, procedures related to securitization transactions and consultation on accounting and internal control matters. Tax services included tax advice, planning, compliance and transaction consulting.

To assure continuing external auditor independence, the Audit and Finance Committee and its Chair considers whether there should be a regular rotation of the independent external audit firms, reviews and evaluates the lead audit partner and his or her team, and ensures the rotation of the lead audit partner and other audit personnel as required by applicable laws and regulations. The Audit and Finance Committee has procedures for pre-approving all audit and non-audit services that the independent registered public accounting firm provides. These procedures include reviewing and approving a budget for audit and permitted non-audit services. The budget includes a description of, and a budgeted amount for, particular categories of non-audit services that are recurring in nature and that we anticipate at the time we prepare the budget. In addition, the Audit and Finance Committee has established a policy that the fees we pay for non-audit services must be less than the fees we pay for audit and audit-related services. Audit and Finance Committee approval is required to exceed the budget amount for a particular category of non-audit services and to engage the independent registered public accounting firm for any non-audit services not included in the budget. For both types of pre-approval, the Audit and Finance Committee considers whether the services are consistent with the SEC’s rules on auditor independence. The Audit and Finance Committee also considers whether

PROPOSALS TO BE VOTED ON

the independent registered public accounting firm is best positioned to provide the most effective and efficient service. The Audit and Finance Committee may delegate pre-approval authority to one or more members of the Audit and Finance Committee. The Audit and Finance Committee monitors the services that our independent registered public accounting firm provides and the actual fees we paid to the independent registered public accounting firm to ensure that the services are within the parameters that the Audit and Finance Committee has approved.

The members of the Audit and Finance Committee and the Board believe the continued retention of Ernst & Young LLP as our independent registered public accounting firm is in the best interests of the company and its shareholders.

				THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

OTHER MATTERS TO COME BEFORE THE ANNUAL MEETING

The Board of Directors and management do not intend to bring any matters before the Annual Meeting other than those to which we referred in the Notice of Annual Meeting and this Proxy Statement. If any other matters come before the Annual Meeting, the persons named in the proxy cards intend to vote the shares that shareholders have authorized those persons to vote in accordance with their judgment on those matters. To bring business before an annual meeting, a shareholder must give written notice to our Secretary before the meeting and comply with the terms and time periods that our Restated Articles of Incorporation specify, as supplemented by our By-laws (see “Shareholder Proposals”). No shareholder has given written notice to our Secretary of his or her desire to bring business before the Annual Meeting in compliance with the terms and time periods in our Restated Articles of Incorporation and By-laws.

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

Independence of Directors

The Board has affirmatively determined that Mses. Levinson and Sylvester and Messrs. Alstead, Anderson, Cave, Golston, Linebarger, Niccol and Zeitz qualify as independent directors under New York Stock Exchange rules. For additional information, please see the “Certain Transactions” section of this Proxy Statement.

Board Committees

The Board has four standing committees: the Audit and Finance Committee, the Human Resources Committee, the Nominating and Corporate Governance Committee and the Sustainability Committee. The Corporate Governance link on our investor relations website located at http://investor.harley-davidson.com contains the charter for each of the committees.

In November 2017, the Audit Committee reviewed its charter and recommended to the Board that no changes were necessary.

In February 2017, two new directors were appointed to serve as members, temporarily increasing the size of the Audit and Finance Committee to seven. In April 2017, two directors who did not stand for re-election to the Board left the Audit and Finance Committee returning the composition to five members.

The Board has determined that all members of the Audit and Finance Committee are independent and financially literate pursuant to New York Stock Exchange rules. The Board has also determined that Messrs. Alstead, Golston, Linebarger and Zeitz are audit committee financial experts within the meaning of the rules of the Securities and Exchange Commission (“SEC”). The section below under the heading “Audit and Finance Committee Report” discusses the functions of the Audit and Finance Committee and its activities during fiscal year 2017.

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

In November 2017, the Human Resources Committee reviewed the Human Resources Committee Charter and recommended to the Board that no changes were necessary.

The Board of Directors has determined that all members of the Human Resources Committee are independent under New York Stock Exchange rules.

The Human Resources Committee has overall responsibility for reviewing total direct compensation (consisting of base salaries, short-term incentive compensation and long-term incentive compensation) for our senior leaders. In addition, the Human Resources Committee reviews other aspects of compensation, such as deferred compensation plans, retirement plans, and health and welfare plans.

The Human Resources Committee has the authority to engage the services of outside advisors, experts and others to assist it in performing its responsibilities. Since 2010, the Human Resources Committee has retained the services of Meridian Compensation Partners, LLC. Representatives of Meridian report to the Chair of the Human Resources Committee. On an annual basis, the Human Resources Committee reviews and approves the scope of Meridian’s services regarding executive compensation, Meridian’s performance and the fees related to work Meridian performed for the Human Resources Committee. The Human Resources Committee retains the right to terminate Meridian’s services at any time. Meridian’s primary responsibilities to the Human Resources Committee include providing:

The Human Resources Committee has considered all factors relevant to Meridian’s independence from management and determined that Meridian is independent and that Meridian’s performance of services raises no conflict of interest. The Human

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

Resources Committee’s conclusion was based in part on a report that Meridian provided to the Committee intended to reveal any potential conflicts of interest.

Each November, the Human Resources Committee reviews executive compensation benchmarking data that Meridian prepares. The following February, the CEO proposes total target compensation, consisting of base salary, a target short-term incentive opportunity and a target value of long-term incentive opportunity, for NEOs (except with respect to his or her own compensation) based on benchmark data as well as company and individual performance. The CEO’s recommendations are subject to the review and approval by the Human Resources Committee, which makes the final determination.

The Human Resources Committee establishes goals and objectives with the CEO and evaluates at least annually the performance of the CEO in light of these goals and objectives. The Human Resources Committee reviews and approves the total compensation of the CEO on an annual basis, including base salary, with input from all of the independent directors on the Board (who comprise the Nominating and Corporate Governance Committee) on the performance of the CEO in meeting his or her goals and objectives and concerning the CEO’s total compensation.

The Human Resources Committee annually approves several Short-Term Incentive Plans (“STIPs”) to motivate and reward the performance of employees of Harley-Davidson and its subsidiaries. The Human Resources Committee also reviews and approves target STIP opportunities for our executive leadership team, which is comprised of our CEO and executives who report directly to the CEO, including all NEOs. The Human Resources Committee approves grants of awards to the CEO and executives who report directly to the CEO, including all NEOs, and the CEO approves grants to other employees within parameters that the Committee has approved. The Human Resources Committee has authorized the CEO to make equity grants to employees in certain other instances (except to executives who report directly to the CEO, including all NEOs), including to help recruit a new employee or retain a current employee or to reward an employee for exceptional service or such other instance that the CEO believes is in our best interest.

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

In November 2017, the Nominating and Corporate Governance Committee reviewed the Nominating and Corporate Governance Committee Charter and recommended to the Board that no changes were necessary.

In February 2017, two new directors were appointed to serve as members, temporarily increasing the size of the Nominating and Corporate Governance Committee to eleven. In April 2017, two directors who did not stand for re-election to the Board left the Corporate Governance Committee returning the composition to nine members.

The Board has determined that all members of the Nominating and Corporate Governance Committee are independent under New York Stock Exchange rules.

The Nominating and Corporate Governance Committee Charter outlines the criteria for identifying and recommending new candidates to serve on the Board. In considering any potential candidate for the Board, the Nominating and Corporate Governance Committee considers the following qualifications:

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

The Nominating and Corporate Governance Committee’s Charter has long required the committee to consider diversity in its process of selecting director nominees. Specifically, the Nominating and Corporate Governance Committee evaluates each candidate for director on, among other things, the basis of the diversity that he or she would bring to the Board, including with respect to business and professional experiences, skills, ethnicity and gender. We believe this policy has been effective in the creation of a Board comprised of diverse members and that the composition of the current Board reflects the Nominating and Corporate Governance Committee’s consideration of diversity in its evaluation and nomination process.

During 2016, the Nominating and Corporate Governance Committee reviewed its succession planning process in light of certain directors who were approaching the retirement age specified in our Bylaws. A third-party search firm assisted the Nominating and Corporate Governance Committee with its recruitment efforts. The search firm recommended candidates that satisfied the Board’s criteria. The search firm also provided research and pertinent information regarding candidates, as the Committee requested. As a result of the succession planning process, four director candidates became new directors after the 2016 annual meeting and before the 2017 annual meeting. All of such director candidates were recommended by the third-party search firm.

The Nominating and Corporate Governance Committee will consider candidates that shareholders recommend. Shareholders may recommend candidates for the Nominating and Corporate Governance Committee to consider by writing to the Nominating and Corporate Governance Committee in care of our Secretary, 3700 West Juneau Avenue, P.O. Box 653, Milwaukee, Wisconsin 53201-0653. The Nominating and Corporate Governance Committee’s policy regarding director candidates that shareholders recommend and the process for evaluating the nominees are as follows:

To enable the Nominating and Corporate Governance Committee to consider a shareholder recommendation in connection with the 2019 annual meeting of shareholders, we must receive the recommendation on or before November 29, 2018.

Submitting a shareholder recommendation to the Nominating and Corporate Governance Committee does not ensure that shareholders will have an opportunity to vote on the shareholder’s candidate because the Nominating and Corporate Governance Committee may determine not to recommend the candidate to the full Board or the full Board may determine not to recommend the candidate to shareholders. Any shareholder who wants to ensure that shareholders will have an opportunity to vote on the shareholder’s candidate may nominate the director candidate for the shareholders to vote on at the 2019 annual meeting of shareholders, in addition to recommending the candidate to the Nominating and Corporate Governance Committee, by giving written notice to our Secretary in advance of the 2019 annual meeting. To give that notice, a shareholder must comply with the terms and time periods of our Restated Articles of Incorporation as supplemented by our By-laws. Our Restated Articles of Incorporation state that a shareholder must give written notice that complies with the Restated Articles of Incorporation and By-laws to our Secretary not less than 60 days before the date in 2019 corresponding to the date we released this Proxy Statement to our shareholders. Because we anticipate mailing the Notice of Internet Availability of Proxy Materials on March 29, 2018, we must receive notice of a nomination for a director candidate for shareholders to consider at the 2019

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

annual meeting of shareholders no later than January 28, 2019. Even if a shareholder delivers a timely notice and otherwise complies with the terms and time periods of our Restated Articles of Incorporation and By-laws, we will not be obligated to name the shareholder’s candidate in our proxy materials.

The Nominating and Corporate Governance Committee is responsible for establishing, reviewing and revising compensation we pay to our directors. The Nominating and Corporate Governance Committee, working with management and third-party compensation consultants and reviewing benchmarked data from a comparator group of companies, determines director compensation that it believes is competitive with these companies. The Nominating and Corporate Governance Committee periodically reviews and revises, when necessary, the Director Compensation Policy, generally with the aid of a compensation consultant. The Nominating and Corporate Governance Committee last revised this policy in April 2016. At that time, the committee approved the following changes, effective April 30, 2016: (1) an increase to the annual retainer paid for service as the Chair of the Nominating and Corporate Governance Committee to $15,000 and (2) an increase to the annual retainer paid for service as the non-executive Chairman of the Board to $160,000 (inclusive of the annual retainer, if any, for concurrent service as chair of a committee). The non-executive Chairman receives this retainer amount in addition to his or her $110,000 Board member annual retainer.

In November 2017, the Sustainability Committee reviewed the Sustainability Committee Charter and recommended to the Board that no changes were necessary.

The Sustainability Committee plays an integral role in providing oversight, advice and assistance to the Board and to the company’s management in developing, implementing and monitoring social and environmental policies, practices and strategies that will foster sustainable growth of the company on a global basis. We define sustainable growth as the ability to grow and operate our business by preserving and renewing the company’s heritage through global opportunities for shared value creation and inclusion. Sustainable growth is driven through leadership and continually challenging the company’s business model, strategies, processes, products, services and other capabilities to realize the substantial long-term value of the company, our heritage, our environment and our people.

As part of providing oversight, advice and assistance to the Board in fostering sustainable growth, the Sustainability Committee assists the Board in ensuring that the company grows without growing our environmental impact, which is consistent with the company’s current strategic plan and our long-term sustainability objective.

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

Board Meetings, Attendance, Executive Sessions and Annual Meeting Attendance

In 2017, there were four regularly scheduled meetings of the Board. All director nominees attended at least 75% of the meetings of the Board and the committees on which they served during 2017.

The Board met in executive sessions during all regularly scheduled in-person meetings, without management present, and plans to continue that practice going forward. The non-executive Chairman of the Board, Mr. Cave presided over these executive sessions.

Unless a director has a conflict in his or her schedule, we expect all directors to attend the Annual Meeting of Shareholders. All of our directors attended our 2017 Annual Meeting of Shareholders and were available to answer any shareholder questions.

Leadership Structure

Currently, our Board leadership structure includes a non-executive Chairman of the Board who is an independent director. Our Corporate Governance Policy gives the Board the flexibility and authority to modify this leadership structure as and when appropriate to best address the company’s current circumstances and to advance the best interests of all shareholders. Mr. Cave serves as our non-executive Chairman of the Board.

The Board currently believes that separating the CEO and Chairman roles will enable our CEO, Mr. Levatich, to focus on the business strategy and operations of the company, while an independent Chairman will provide the continuity of leadership of the Board necessary for the Board to fulfill its responsibilities.

The Board’s Role in the Oversight of Risk

While the Board has the ultimate responsibility for oversight of the risk management process, various committees of the Board have a role in the oversight of risk management. In particular, the Audit and Finance Committee focuses on financial risk, including the oversight of the systems of internal control over financial reporting, and it receives an assessment of the company’s systems to monitor and manage business risk from our independent registered public accounting firm. Internal audit regularly reviews risk management processes and internal controls with the Audit and Finance Committee. The Audit and Finance Committee also receives a report at each regular Audit and Finance Committee meeting on legal and compliance matters. In addition, the Human Resources Committee reviews our compensation programs for compensation risk as we describe further in the “Compensation Discussion and Analysis” section of this Proxy Statement. Risk management is an integral part of our annual strategic planning process. The entire Board reviews the strategic risk management plan at least annually.

Shareholder Communication with the Board

Shareholders and other parties interested in communicating with the Chairman of the Board or with non-management directors, including committee chairs, may do so by writing to such director, in care of our Secretary, 3700 West Juneau Avenue, P.O. Box 653, Milwaukee, Wisconsin 53201-0653. The Corporate Governance area on our investor relations website located at http://investor.harley-davidson.com lists the current members of the Board of Directors. We open and forward all mail to the director or directors specified in the communication.

CERTAIN TRANSACTIONS

CERTAIN TRANSACTIONS

Policies and Procedures Governing Related Person Transactions

In December 2002, our Nominating and Corporate Governance Committee adopted a written policy regarding transactions with related persons. The committee amended this policy, which we refer to as our Conflict of Interest Process for Directors, Executive Officers and other Employees, in December 2003.

Under the policy, conflict of interest issues for the CEO or any director shall be submitted to and reviewed by the Chair of the Nominating and Corporate Governance Committee. If the Chair of the Nominating and Corporate Governance Committee determines that an actual conflict of interest issue exists, then the entire Nominating and Corporate Governance Committee reviews the potential conflict of interest. If our Nominating and Corporate Governance Committee determines that an actual conflict exists, the Committee decides whether to waive the conflict or require the CEO or director to remove the conflict. Any conflicts that are waived by our Nominating and Corporate Governance Committee are promptly disclosed to our shareholders.

Our Vice President and Chief Legal Officer reviews any potential conflict that arises for any executive officer (other than our CEO and the Vice President and Chief Legal Officer). Our CEO reviews any potential conflict that arises for our Vice President and Chief Legal Officer. If the Vice President and Chief Legal Officer or CEO determines that an actual conflict of interest issue exists, the Chair of the Human Resources Committee reviews the potential conflict. If the Chair of the Human Resources Committee determines that an actual conflict of interest issue exists, the entire Human Resources Committee reviews the potential conflict of interest. If our Human Resources Committee determines that an actual conflict exists, the Committee decides whether to waive the conflict or require the officer to remove the conflict. Any conflicts that are waived by our Human Resources Committee are promptly disclosed to our shareholders.

Any conflict of interest issue involving any other employee is reviewed by an attorney in our Legal Department. If the attorney believes that an actual conflict of interest issue exists, then the attorney submits the conflict of interest issue to our Vice President and Chief Legal Officer. If our Vice President and Chief Legal Officer determines that an actual conflict exists, then he decides what steps should be taken to resolve the conflict.

Certain Transactions

Mr. Linebarger, a director, is the Chairman and Chief Executive Officer of Cummins Inc. During 2017, we continued a modest commercial relationship with Cummins, a relationship that existed before Mr. Linebarger joined the Board of Directors, under which we purchased exhaust parts and components from subsidiary companies of Cummins Inc. The transactions were negotiated on an arm’s-length basis and were below $120,000. Accordingly, the relationship does not prevent Mr. Linebarger from qualifying as an independent director and the Board considers Mr. Linebarger to be an independent director. Because Mr. Linebarger is the current Chair of the Nominating and Corporate Governance Committee, the entire Nominating and Corporate Governance Committee (excluding Mr. Linebarger) considered this relationship under our Conflict of Interest Process, and it determined that no actual conflict of interest issue exists as a result of the relationship.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes our executive compensation philosophy, program, performance and policies for the fiscal year 2017. Our named executive officers, or NEOs, for 2017 were:

EXECUTIVE SUMMARY

2017 Company Performance

In 2017, Harley-Davidson announced its ten-year strategy focused on building the next generation of Harley-Davidson riders globally. The company’s objectives through 2027 are to:

The company made solid progress on its strategy and objectives during its first year of execution. It finished 2017 with a net increase of over 32,000 Harley-Davidson riders in the U.S. compared to 2016. These riders were inspired by a number of pivotal actions we took during the year, including a more inclusive and welcoming brand promise: “All for Freedom, Freedom for All”; improved conversion of graduates from the Harley-Davidson Riding Academy to Harley-Davidson owners; increased riding access through our partnership with EagleRider, and the launch of our all-new, highly acclaimed Softail^® motorcycles.

Amid challenging business conditions in the U.S. industry and in international markets, we maintained our No. 1 market share in key worldwide markets, including the U.S., Australia, Canada, India, and Japan. We also successfully launched 17 new high-impact motorcycles that have been well received by riders around the globe and increased reach and impact by opening 57 new dealerships in countries like South Korea, Thailand, El Salvador, Germany and Russia.

Our ongoing environmental sustainability efforts include focusing on improving fuel economy and reducing the amount of material in our vehicles. The new Softail lineup achieved ambitious targets, yielding a 7% improvement in fuel economy and up to 35 pounds per model weight reduction.

With focused attention on disciplined supply management and effective resource allocation and cost structure, our U.S. dealers ended the year with appropriate retail inventory, and we reduced SG&A spending and again returned excess cash to our shareholders.

While we expect continued headwinds in the U.S. industry during 2018, we believe we are well-positioned to navigate through these challenges and deliver on our long-term strategy to build the next generation of Harley-Davidson riders globally while continuing to deliver strong ROIC and cash returns to shareholders.

EXECUTIVE COMPENSATION

2017 NEO Pay for Performance

Despite our progress in many areas of strategic importance in 2017, financial performance generally fell short of our expectations based on the targets that we set. The compensation outcomes under our incentive plans were all below target for the year, which demonstrates alignment of pay and performance for our NEOs. Additionally, our performance through 2017 is below relevant targets for the 2016 and 2017 performance share awards under the Long-Term Incentive Plan.

Full details regarding the measures, performance targets and outcomes can be found on pages 33-36.

The pay outcomes described above resulted in our NEOs realizing actual compensation for 2017 that was well below each NEO’s total target pay. The table below presents a calculation of that shortfall, which illustrates that each NEO’s realized pay was between 22% and 36% below the NEO’s total target pay.

EXECUTIVE COMPENSATION

The Human Resources Committee believes we have structured our executive compensation program to support our company strategy, to attain our business objectives, and to deliver shareholder value while meaningfully aligning pay with performance. Compensation for 2017 demonstrated this, with NEOs’ realized compensation falling below their target compensation based on our performance and stock price, consistent with our pay-for-performance philosophy.

2017 Committee Activity

The results of the shareholder advisory vote on executive compensation at our 2017 Annual Meeting of Shareholders were favorable, with 96.2% of the votes cast supporting our executive compensation program.

Based on the high level of shareholder support for our 2016 executive compensation program, the Committee has retained many of the same executive compensation elements for 2018. However, we believe it is prudent to continue to review our program, and as a result, we have approved the following changes for 2018:

EXECUTIVE COMPENSATION APPROACH

An Overview of our Executive Compensation Program

EXECUTIVE COMPENSATION

Executive Compensation Philosophy

The Human Resources Committee has overall responsibility for approving the compensation of our executive leadership team, which is comprised of our CEO and executives who report directly to the CEO, including all NEOs.

Our executive compensation goals and guiding principles emphasize pay-for-performance. We base several elements of our compensation upon delivering high levels of performance relative to performance measures that the Human Resources Committee has approved. For example, (i) the annual Financial Short-Term Incentive Plan (STIP) and the performance shares require that we achieve financial performance before recipients are entitled to this compensation; and (ii) the equity component of our compensation program provides greater financial benefits when our stock price is increasing. Our goals and guiding principles are as follows:

Human Resources Committee

The Committee currently has four independent Directors. We summarize details of the Committee’s duties in the Corporate Governance Principles and Board Matters-Human Resources Committee section of this proxy statement and they appear in the Compensation Committee’s charter which can be found on our website.

Use of a Human Resources Committee Executive Compensation Advisor

The Committee has the sole authority to engage the services of outside advisors, experts, and others to assist in performing its responsibilities. Since 2010, the Committee has retained Meridian Compensation Partners LLC as its outside executive compensation advisor. We describe the independent advisor’s primary responsibilities and reporting obligations more fully in the “Corporate Governance Principles and Board Matters-Human Resources Committee” section.

In accordance with the Committee’s charter, if the Committee chooses to use an advisor, the advisor must be independent. We consider an advisor to be independent if the advisory firm does not provide services or products of any kind to the company or any of its subsidiaries, the advisory firm does not derive more than 1% of its gross revenues from the company and the advisory firm is precluded from providing any other services to the company. During 2017, Meridian performed no services for the company beyond its engagement with the Committee.

The Committee assessed Meridian’s independence, based in part on assurances and confirmation from Meridian as to its independent status. The Committee has concluded that Meridian had no conflicts and believed that Meridian has remained independent throughout its engagement by the Committee.

Target Setting and Performance Review Process

In general, we have based our executive compensation program upon delivering high levels of performance relative to performance goals and measures that the Committee approves on an annual basis. The Committee, with the support of management and Meridian, considers many aspects of the company’s financial and operational performance when making executive compensation decisions.

Prior to the start of each performance year, typically in November, the Committee establishes meaningful goals for performance-based compensation including performance measures, measure weighting, thresholds, targets, and maximums for incentive plan compensation. We set targets based on our operating plan and intend that they will drive our strategy. Payment of incentive plan compensation is contingent on the achievement of these goals, and failure to meet the performance goals will reduce or eliminate payments.

The Committee established these measures, weighting and performance levels (thresholds, target and maximum), which it believes were appropriate and balanced, to provide an adequate incentive for participants to strive to achieve our financial and other business objectives for 2017.

EXECUTIVE COMPENSATION

The Committee reviews performance to plan and projected payouts of our executive compensation program at each meeting over the course of the year.

We generally pay Financial STIP and Leadership STIP awards in February after the prior year’s financial statement audit is complete and the Committee reviews and approves earned amounts. The Committee has the right to reduce awards that executives would otherwise earn under the STIPs.

Executive Compensation Pay Review Process

Each November, the Committee reviews executive compensation benchmarking data that Meridian prepares.

The following February, the CEO proposes total target compensation, consisting of base salary, target short-term incentive opportunity and target long-term incentive opportunity, for NEOs (except with respect to his own compensation) based on benchmark data as well as company and individual performance. The CEO’s recommendations are subject to the review and approval by the Committee, which makes the final determination.

The Committee establishes goals and objectives with the CEO and evaluates at least annually the performance of the CEO in light of these goals and objectives. The Committee reviews and approves the total compensation of the CEO on an annual basis, including base salary, with input from all of the independent directors on the Board (who comprise the Nominating and Corporate Governance Committee) on the performance of the CEO in meeting his or her goals and objectives and concerning the CEO’s total compensation.

Use of Executive Compensation Peer Group

Consistent with historical practices, the Committee used two peer groups in benchmarking our executive compensation practices and levels for 2017:

The Committee uses weighted compensation data from these two peer groups to reflect the company’s unique emphasis both on the maintenance of the Harley-Davidson brand, and on manufacturing and engineering excellence.

The Committee reviews compensation levels and reward practices of the companies within these two peer groups. We weight compensation data from the Manufacturing/Engineering Peer Group 60% and compensation data from the Brand Name/Consumer Goods Peer Group 40%. If data from the peer groups are unavailable or inadequate for a particular executive position, then we determine the competitive market by using data that we obtain through the Aon Hewitt 2017 U.S. Total Compensation Measurement (TCM) survey; you can find a list of all of the companies in this survey by clicking on the “Compensation Survey Participants” link at http://investor.harley-davidson.com/ phoenix.zhtml?c=87981&p=irol-govhighlights&locale=en_ US&bmLocale=en_US.

In conjunction with the company’s internal compensation team, the Committee’s compensation advisor size-adjusts the data using regression analysis to normalize to revenue and/or asset size of the appropriate corporate or business unit. We benchmark NEO compensation relative to the 50th percentile. The Committee believes the regressed, weighted data that we derive from the two peer groups accurately reflect the competitive market for executive compensation for our NEOs. In addition, the Committee believes the use of blended compensation data is necessary to appropriately reflect the significantly different compensation philosophies and practices of Brand Name/Consumer Goods companies and Manufacturing/Engineering companies.

In selecting peer companies, on an annual basis, the Committee takes account of both revenues and where Harley-Davidson competes for executive talent. We also recognize that mergers and acquisitions or other business transactions may impact a number of peer group companies, which we take into consideration as we determine our peer groups for future years. The peer groups for 2017 were as follows:

Manufacturing Peer Group

EXECUTIVE COMPENSATION

Branded Peer Group

ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

We believe our employees and our culture of leadership are the basis for a strong company. We are in competition to attract and retain talent, primarily with companies for whom engineering, manufacturing and the development of a strong global product brand and marketing focus are critical to their businesses. We have designed our executive compensation program to help us succeed in attracting, retaining and motivating talent in a competitive talent marketplace.

The compensation program for our executives, and more specifically our NEOs, consists of four primary elements: base salary, short-term incentives, long-term incentives and employee benefits. In certain circumstances, such as for new hires, special recognition or retention, we may provide compensation outside of these four primary elements in accordance with our executive compensation goals.

In the balance of this section, we provide details regarding our 2017 executive compensation program, along with the associated decisions and outcomes.

Base Salary

The first element of our executive compensation program is base salary. In setting and reviewing base salaries for NEOs, the Committee considers data for our compensation peer group. We set base salaries by starting with salary midpoints that are generally at the competitive market 50th percentile. We then adjust base salaries as appropriate and on a subjective basis by individual, generally within a range of plus or minus 20%, based upon individual performance, experience, job scope, impact, accomplishments against key initiatives, general business performance and economic conditions.

We base executives’ annual increases in base salary on the same guidelines that apply to all other eligible salaried employees, and such increases are not guaranteed. In 2017, we approved the following base salary increases:

EXECUTIVE COMPENSATION

Short-Term Incentive Plan

The second element of our executive compensation program is our Short-Term Incentive Plan. In 2017, our short-term incentive plan had two components:

In November 2016, as part of the annual target setting process, the Committee reviewed and approved the 2017 performance measures and goals for each plan. The Committee also determined the amount of compensation that we would pay to each NEO, expressed as a percentage of his or her base salary if the actual company performance resulted in a payout at target for 2017. We based that amount on the competitive market 50th percentile plus or minus 20%. The NEOs’ target short-term incentive opportunities under the Financial STIP and the Leadership STIP for 2017 were as follows:

Actual payments under the Financial STIP can range from 0% to 200% of an individual’s Financial STIP target opportunity based on performance, while actual payments under the Leadership STIP cannot exceed an individual’s Leadership STIP target opportunity. Combined payouts under the Financial and Leadership STIPs cannot exceed 200% of a participant’s Financial STIP target opportunity.

The Committee determined the target opportunities for the CEO based upon a review of market compensation data with input from Meridian. Accordingly, the Committee approved an increase in the CEO’s Financial STIP target opportunity from 125% of base salary to 130% of base salary for 2017; there was not an increase in his Leadership STIP target opportunity. Based on recommendations from Mr. Levatich and informed by Committee review of competitive market data, there were no changes to Financial STIP or Leadership STIP target opportunities for the other NEOs for 2017.

EXECUTIVE COMPENSATION

2017 Financial STIP

In November 2016, the Human Resources Committee reviewed and approved the 2017 Financial STIP including performance measures and goals under that plan.

The financial measures for the 2017 Financial STIP were as follows:

Upon completion of the fiscal year, the Committee reviews the extent to which actual performance compares to the defined performance goals for the Financial STIP. For 2017, outcomes under the Financial STIP relative to targets under performance goals were as follows:

EXECUTIVE COMPENSATION

2017 Leadership STIP

In November 2016, the Human Resources Committee approved the Leadership STIP for 2017 that covered our executives, including our NEOs.

NEOs were able to earn the 2017 Leadership STIP based upon four measures that included improvements in project management, organizational effectiveness, the advancement of certain strategic initiatives and other financial metrics. All four measures were weighted equally. Combined payouts under the Financial STIP and Leadership STIP could not exceed 200% of a participant’s Financial STIP target opportunity.

The Committee reviewed the aggregate performance of the organization relating to the four Leadership STIP measures for 2017 and determined that the delivered performance equated to 97.0% of the target.

2018 Short-Term Incentive Plan Design

In November 2017, the Committee approved the 2018 Financial STIP consisting of a single annual plan for all eligible employees.

The key measures for the 2018 Financial STIP are the following, in each case subject to certain adjustments that the Committee may approve, with the relative weightings that the Committee assigned to each:

Under the 2018 Financial STIP, if we do not achieve net income of at least $409 million in 2018, then we would not make any payouts, regardless of performance under other financial measures. As a result, the minimum payout could be 0%, the payout at the threshold level of performance is 50% of a participant’s Financial STIP target opportunity, and the maximum payout would not exceed 200% of a participant’s Financial STIP target opportunity. The Committee determined that there was a reasonable likelihood that employees could achieve the goals and earn incentive compensation at the target performance level.

Long-Term Incentive Plan

The third element of our executive compensation program is the long-term incentive plan. We make long-term incentive awards in the form of performance shares (67%) and restricted stock units (33%). We use this mix to create a substantial focus on achievement of the long-term success of the company by having a significant portion of the executive’s compensation “at risk” such that executives will not receive value without performance and to directly tie the value they receive to financial performance.

The Committee believes that our long-term incentives are a key component of total compensation as they:

The Committee determined each NEO’s target value of long-term incentive opportunity, which we express as a percentage of base salary, based on the competitive market 50th percentile plus or minus 20%. Accordingly, with input from Meridian, the Committee approved an increase in the CEO’s target value from 450% of base salary to 455% of base salary for 2017. Based on recommendations from Mr. Levatich informed by competitive market data, we changed Ms. Kumbier’s target value for 2017 from 170% of base salary to 180% of base salary; target values for the other NEOs for 2017 remained the same.

We converted the target value of long-term incentive opportunity for each NEO into an award of performance shares and an award of restricted stock units. For this conversion, we valued each performance share and each restricted stock unit at an amount equal to the closing price of a share of our stock on the date of grant. We grant restricted stock units to an executive in

EXECUTIVE COMPENSATION

a year only if he or she met or exceeded objective and subjective performance standards that applied to him or her in the preceding year. For purposes of 2017 grants, the Committee determined that all NEOs met or exceeded applicable performance standards in 2016. We make awards under our 2014 Incentive Stock Plan.

Performance Shares

Performance shares allow the executive to earn a specified number of shares of our common stock at the end of the three-year performance period (2017 through 2019) that will range between 0% and 200% of the initial award amount. As a result, the number of performance shares an NEO earns is based on company performance, and the value that the NEO realizes is tied to the stock price at that time. To the extent awards vest, the participant will also receive the accumulated dividends that have accrued over the performance period, in direct proportion to the number of performance shares that actually vest.

The performance measures applicable to the performance shares granted in 2017 are:

These measures are derived from our segment financial results as presented in the notes to our consolidated financial statements except that we use the monthly information to calculate averages and our financial statements and notes may not disclose detailed amounts for the excluded items because the details are not required for financial statement reporting purposes.

The Committee will assess performance at the conclusion of the three-year performance period to determine what, if any, portion of the award will vest.

EXECUTIVE COMPENSATION

For each measure, we set the threshold performance requirement at 70% of target and the maximum performance at 105% of target. We set targets based on our approved three-year operating plan. The Committee believes this structure is in the best interests of our shareholders, as it focuses behaviors on the realization of long-term strategic goals of the organization and the use of shareholder capital to drive value creation and strong returns. The Committee determined that there was a reasonable likelihood that we would perform at the target performance level.

Restricted Stock Units

Restricted stock unit awards allow executives, including our NEOs, to receive shares of our common stock in the future after the awards vest, which will occur only if the individual remains an employee or certain other circumstances apply. Restricted stock unit awards vest in three equal annual installments beginning one year after the grant date. During the vesting period, the recipient is eligible to receive dividend equivalents on a current basis on each restricted stock unit in the same amount as dividends that are declared and paid quarterly on each share of stock.

Under the vesting rules of our restricted stock unit awards, a recipient who has attained the age of 55 and eligibility for retirement and who retires from the company will have all awards that were granted 12 or more months prior to the date of retirement vested upon retirement.

The Committee believes that restricted stock unit awards complement our use of performance shares by providing an effective and valuable tool to attract and retain executives.

2018 Long-Term Incentive Plan Design

We used this mix to create a substantial focus on achievement of the long-term success of the company by having a significant portion of the compensation “at risk” such that executives will not receive value without performance and to directly tie the value they receive to financial performance.

The performance measures applicable to the 2018 awards of performance shares are as follows, in each case defined in a manner substantially similar to 2017:

Payout under the 2015 Cash-Based Long-Term Incentive Awards

Prior to 2016, we granted cash-based long-term incentive awards to our NEOs. We made awards in 2015 relating to performance over the three-year period ending December 31, 2017. The payout was based on performance relative to goals for the average return on invested capital (ROIC) for HDMC and could range from 0% to 200% of an NEO’s target award value.

The performance measure applicable to the 2015 awards was as follows:

HDMC Return on Invested Capital (ROIC): the average of (i) HDMC Net Operating Income After Tax by (ii) HDMC Invested Capital, for 2015, 2016 and 2017

These measures are derived from our segment financial results as presented in the notes to our consolidated financial statements except that, as part of those filings, we do not disclose the impact of the 2017 tax act from a segment perspective.

EXECUTIVE COMPENSATION

The performance period for the cash-based long-term incentive awards that we granted in 2015 ended on December 31, 2017. The following table describes actual performance against the performance goal and the related payout relative to target:

We paid out the awards in February 2018 following the assessment of performance and approval by the Committee.

Employee Benefits

The fourth element of our executive compensation program is the benefits that we generally offer in similar form and manner to our other salaried employees with the addition of limited executive perquisites. The goal is to provide benefits that are competitive in the marketplace where we compete for executives at the senior leadership level.

Retirement and Savings Plans

EXECUTIVE COMPENSATION

Limited Executive Perquisites

EXECUTIVE COMPENSATION POLICIES AND GUIDELINES

The following policies and agreements have been adopted to further the goals of the executive compensation program and underpin our program with robust governance practices. The Committee believes these are appropriate and reflect the expectations of our shareholders while providing for clear alignment between the interests of executives and those of shareholders.

Annual Compensation Risk Assessment

In establishing and reviewing our executive compensation program, the Committee considers, among other things whether the program pays the executives for performance and whether the program encourages unnecessary or excessive risk-taking. The Committee reviews the primary elements of executive compensation annually.

The Committee believes that our compensation program, in particular, our cash incentive plans and long-term incentives, appropriately balance risk, pay for performance and the desire to focus executives on specific financial and operational measures. Furthermore, the Committee believes our program does not encourage unnecessary or excessive risk-taking, nor does it create risks that are reasonably likely to have a material adverse effect on the company.

EXECUTIVE COMPENSATION

To help mitigate compensation risk, and align executives’ interests with those of our shareholders, we have adopted a number of policies as follows.

EXECUTIVE COMPENSATION

Other Compensation Policies and Guidelines

The Committee has also adopted the following policies in line with typical market practices.

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

Summary Compensation Table