Contested annual meeting, Nov. 4, 2026: preliminary results · Meeting page
On preliminary results, holders of Ethan Allen (ETD) did not re-elect Farooq Kathwari, chair and chief executive since 1988, and gave a majority of the board to the slate of Doug Bergeron, whose group owns 5.2%. Bergeron, Kristine Miller and Stephen Oblak won three of the five seats, and Maria Eugenia Casar and Tara Stacom kept theirs. Lead independent director David Sable and Cynthia Ekberg Tsai also lost. Holders approved the pay resolution and the auditor. The stock traded up on the news.
The board had committed to name Kathwari’s successor as chief executive by June 30, 2027, with the chair and CEO roles separated and Kathwari leaving the board at the 2027 annual meeting. It argued that a full change would mean two CEO handovers and disrupt a search already under way.
We saw a real chance for Bergeron to win seats, and the majority is a big win
On October 20 we called the record Bergeron’s best case: four straight years of falling sales, an operating margin down to 7.8% from a pandemic-era peak of 17.3%, and a chair and chief executive renominated past the board’s guideline age of 77. The board pointed to lower State Department sales, no debt and continued profits, and Ethan Allen’s five-year return beat the Russell 2000. We gave Bergeron a real chance at one or two seats and thought the board more likely to keep its majority. He won three.
Kathwari holds about 6.3% of the votes, and about 8.5% with his family foundation’s shares, in which Ethan Allen says he has no reportable financial interest. On preliminary results he finished outside the top five.
Ethan Allen reports first-quarter results on November 9, after the vote, and we had asked it to report first. Bergeron said results had come before the meeting for two decades. Ethan Allen said the timing “has not been altered by the proxy contest.”
The first job is deciding who runs the company
Kathwari’s contract runs to June 30, 2027. Bergeron’s October 28 plan was for his nominees to recommend Stefanie Tsen Ward as interim CEO, running day-to-day operations right after the meeting, with Kathwari offered a non-voting role as chairman emeritus. Ward did not win a seat, though a chief executive need not be a director.
Bergeron said on November 2 that the other incumbents “are not innocent bystanders,” and named Casar and Stacom. Holders re-elected both, and on November 4 he said he looks forward to “working constructively with our fellow directors.” Casar and Stacom hold two of the five votes on the next CEO.
Ethan Allen said independent directors led by Sable and Tsai were running the CEO search with an outside firm, and on preliminary results neither returns. Bergeron says the new majority will work with Kathwari “to ensure an orderly transition.”
Three seats may bring severance terms into play, and the new board inherits a tight dividend
Bergeron’s proxy statement says electing three of his nominees “could be deemed” a change in control unless the board approved them in advance, as he asked; we found no such approval. Even then, nothing is paid unless an executive is let go within two years or quits for “good reason.” Ethan Allen’s June 30 estimate for that case totals about $10.9 million for its five top executives: about $6.1 million of cash and benefits and about $4.8 million of equity, valued before the $3.00 special dividend.
Kathwari would keep most of his equity on retirement anyway. His contract lists being removed from, or not appointed to, his post as a director among the grounds for good reason, which by our reading could apply. That would bring two years’ salary and bonus, about $4.3 million of the $10.9 million.
Bergeron said in September he would seek repayment of his campaign costs, about $3.5 million by then, without a holder vote.
Neither side has proposed changing the regular dividend. It costs about $39 million a year, about 95% of last fiscal year’s free cash flow; over three years, free cash flow of $162 million covered $147 million of dividends. Ethan Allen has no debt and said before the vote that it expected to keep about $85 million of cash and investments after the $3.00 special dividend. Bergeron’s plan promises to “protect the regular dividend while funding growth that earns attractive returns.” First-quarter results will show how much room the new board has to do both.
Our view: shareholders largely agreed with Bergeron, and now he has to deliver
We argued that Ethan Allen needed new directors now, and that replacing the whole board at once carried real risk. This result addresses both. It adds retail and digital experience from eBay and Wayfair and keeps the audit committee chair and a director who has served since 2015. It’s potentially a better outcome for holders than either full slate would have been.
Bergeron said in August that Ethan Allen has “the potential to triple shareholder value over the next three years.” He now has to show it, starting with a margin where each percentage point is worth about $5.8 million a year of operating profit. He says the new directors “expect to be judged by our results.” That’s the right standard.
What we’d like to see: the new board should say quickly who runs Ethan Allen and on what terms, including any payment to Kathwari. It should give Casar and Stacom a real role in choosing the permanent CEO and look beyond Bergeron’s own slate. Repayment of his campaign costs should go to a holder vote, and the board should set a margin goal and say how cash will be split between dividends, buybacks and the business.
The four outside directors should build real stakes with their own money once trading rules allow. In September, Miller, Oblak and Casar owned no shares outright and Stacom owned 6,300; Bergeron’s agreement with his nominees barred them from trading without his consent, and he should lift that.
What to watch
- Certified resultsThe 8‑K with vote counts, which will show how close each race was.
- Nov. 9First-quarter results: orders, margin and cash after the dividends paid since June.
- Next 8‑K on leadershipWho is named interim CEO, on what pay, and whether Kathwari stays, leaves or takes a severance payment.
- Form 4sWhether the new directors buy stock.
- Mid-February 2027The end of the first 100 days in Bergeron’s plan, which is meant to validate its key assumptions.
Sources: Ethan Allen’s and Doug Bergeron’s November 4 statements, and both sides’ SEC filings, as of November 4, 2026. Results are preliminary, from a count by Ethan Allen’s proxy solicitor, and subject to certification. Holdings and severance figures are as in our October 20 brief. Boardroom Alpha is an independent research and analytics company and does not invest. This brief is for information only and is not investment advice or a proxy solicitation.