Bergeron calls Ethan Allen succession announcement ‘too little, too late’
DANBURY, Conn. — The battle over Ethan Allen’s future leadership escalated Monday afternoon, just hours after the company announced a formal CEO succession process, as activist investor Doug Bergeron called the move “too little, too late” and questioned whether the current board should be entrusted with choosing the company’s next chief executive.
Bergeron made the comments in a statement issued Sept. 21 and provided to Furniture Today by Gasthalter & Co., which is handling media inquiries for his campaign. Bergeron and his affiliates own approximately 5.2% of Ethan Allen Interiors’ outstanding shares and are seeking to replace the company’s five-member board with their own slate of nominees.
His response followed Ethan Allen’s announcement earlier Monday that its Corporate Governance, Nominations and Sustainability Committee, composed entirely of independent directors, is conducting what the company described as an “ongoing formal CEO succession process.” Ethan Allen said it has retained an executive search firm, is considering internal and external candidates and intends to announce a successor to Chairman, President and CEO Farooq Kathwari no later than June 30, 2027, when Kathwari’s current employment agreement expires.
Bergeron challenged both the timing of that announcement and the board’s handling of succession.
“Ethan Allen’s September 21, 2026, recognition that the Company needs new leadership is too little, too late,” Bergeron said in the statement. He contended that succession questions have existed for years and argued that the board’s announcement came only after his campaign increased pressure on the company.
Bergeron pointed to an Aug. 7 Bloomberg Television interview in which Kathwari, responding to questions about his continued leadership, said the board had “never raised this issue.” Bergeron’s group subsequently announced Sept. 10 that its alternative slate of director candidates had begun its own independent CEO search.
Ethan Allen filed its preliminary proxy statement with the Securities and Exchange Commission the following day. Bergeron said that filing did not disclose a formal CEO search or specific transition timetable, contrasting it with Monday’s announcement describing an ongoing formal search and establishing a deadline for naming Kathwari’s successor.
“A credible succession process should not have needed a proxy contest to become visible to shareholders,” Bergeron said.
Ethan Allen presented a different view in its Sept. 21 announcement. The company said CEO succession is a standing board agenda item and that directors regularly evaluate leadership capabilities, emergency and long-term succession planning and the management skills necessary to execute the company’s strategy.
The company also said it is seeking a CEO capable of building on Ethan Allen’s existing strategy while accelerating digital transformation, omnichannel retail execution and supply chain efficiency.
Bergeron seized on those priorities, arguing that they overlap with areas his campaign has identified as weaknesses in Ethan Allen’s performance. He also questioned whether directors who have supported Kathwari throughout his long tenure should be responsible for selecting his successor.
That issue could become increasingly important in the proxy contest. Bergeron’s campaign is now framing the board election not simply as a referendum on Ethan Allen’s operating performance and Kathwari’s tenure, but as a choice over which group of directors will oversee the selection of the company’s next CEO.
Under Ethan Allen’s announced plan, Kathwari will continue leading the company during the search and transition. After stepping down as CEO, he has agreed to remain on the board as a non-executive director until Ethan Allen’s 2027 annual meeting, when he is expected to leave the board.
Kathwari said in Ethan Allen’s announcement that he supports the board-led succession process and is committed to helping ensure an orderly transition. The company said the timetable is intended to provide continuity while allowing the board to conduct a deliberate search.
Bergeron sees the timetable differently. He argued that allowing the process to continue until June 2027 could leave Kathwari in charge for another nine months and said the company needs board and leadership changes sooner.
The competing approaches to succession add another dimension to an already contentious proxy fight. Bergeron’s slate has begun identifying potential CEO candidates, while Ethan Allen’s incumbent board is conducting its own search.
As the campaign moves forward, the argument is increasingly becoming about more than who should run Ethan Allen. It is also about who shareholders trust to choose the person who runs it next.
