All Three Leading Independent Proxy Advisory Firms Agree Leadership Change Is Desperately Needed at Ethan Allen

Doug Bergeron, Significant shareholder of Ethan Allen Interiors Inc.

“All three leading proxy advisory firms have recommended removing Chairman and CEO Farooq Kathwari and lead independent director David Sable – a powerful repudiation of the leadership and governance structure that has presided over years of underperformance, failed to hold management accountable, and left Ethan Allen ill-prepared for its most consequential leadership transition as a public company.”

Doug Bergeron, Significant shareholder of Ethan Allen Interiors Inc.

“Replacing just two directors, however, is not enough to address the extensive failures identified by ISS. Meaningful change cannot be achieved if the directors responsible for these failures retain majority control.”

Doug Bergeron, Significant shareholder of Ethan Allen Interiors Inc.

“We do not see how Ethan Allen can deliver improved performance while the same incumbent directors remain in control. That is why we are asking shareholders to give us a mandate to effect this change by voting for all five of our nominees.”

Doug Bergeron, Significant shareholder of Ethan Allen Interiors Inc.

“Our slate of five highly qualified director nominees has a singular objective: to restore profitable growth and create enduring value for Ethan Allen shareholders.”

Institutional Shareholder Services, Proxy advisory firm

“ETD has generally underperformed both its peer group and broader market benchmarks across important measurement periods, including since the 2015 proxy contest. The company's occasional periods of relative outperformance could be considered a bright spot, but the overall trends raise questions regarding the effectiveness of the company's strategy in delivering sustained shareholder value creation.”

Institutional Shareholder Services, Proxy advisory firm

“…achievements have been accompanied by revenue contraction, margin compression, and multiple deterioration. This suggests that ETD has struggled to translate financial discipline into sustained operating momentum, competitive growth, and shareholder returns comparable to those achieved by peers.”

Institutional Shareholder Services, Proxy advisory firm

“As the company has struggled on these fronts, the industry has increasingly moved from the physical world to the digital realm at a faster rate. It is difficult to interpret this as only a coincidence. Ultimately, Kathwari owns this strategy, and it is important that the next CEO have a more receptive attitude to the evolving realities of the business environment.”

Institutional Shareholder Services, Proxy advisory firm

“Despite these ongoing challenges, there is little evidence that the board was willing to acknowledge and address concerns before the dissident launched its campaign.”

Institutional Shareholder Services, Proxy advisory firm

“The extent to which the board has adequately prepared for a future without Kathwari is a central issue in this contest. The record suggests succession planning has been reactive rather than proactive. The board's willingness to shield Kathwari became evident during discussions with ISS, when basic questions were filibustered, redirected, or met with resistance.”

Institutional Shareholder Services, Proxy advisory firm

“During engagement with ISS, discussions regarding the company's competitive position revealed little evidence that incumbent directors have independent views on key matters.”

Institutional Shareholder Services, Proxy advisory firm

“Moreover, the board's approach to this contest has featured tactics of diversion and obfuscation. These are damaging, in that they compromise the ability of shareholders to trust the board, particularly on important matters like a CEO succession.”

Institutional Shareholder Services, Proxy advisory firm

“This attempt to focus shareholders on the timing of the [release date for its fiscal first quarter 2027 results], rather than on the timing of the report itself (which will take place later than the company's established practice), is consistent with other transparent attempts to redirect the narrative. Shareholders expect better from their elected representatives.”