Glass Lewis Backs Full Activist Slate at Ethan Allen as ISS Splits, Setting Up Contentious November Vote

Activist investor Doug Bergeron's campaign to overhaul the board at ETD just hit a critical juncture. Glass Lewis has recommended that Ethan Allen shareholders vote for all five of Bergeron's director nominees, marking the second major proxy advisory firm to back a complete board refresh at the 98-year-old furniture maker ahead of its November 4 annual meeting. But the battle is far from settled.

ISS urged shareholders to back activist Doug Bergeron and one of his nominees while withholding support from CEO Farooq Kathwari, but stopped short of backing the full slate, recommending only Bergeron and nominee Stephen Oblak. That split recommendation injects fresh uncertainty into what has become one of the most contentious proxy fights of the 2026 season.

Three Advisors, Three Different Verdicts

The divergence among the big three proxy advisors underscores just how unusual this fight has become. Egan-Jones endorsed all five of Bergeron's director nominees and recommended withholding votes from each incumbent director. Glass Lewis followed with a full-throated endorsement, stating that DGB Investments "appears to have offered investors a credible and reasonably robust strategic and financial agenda" alongside a slate better prepared to address what it called "muted accountability, operational backsliding and sputtering shareholder value."

ISS, the largest and most influential U.S. proxy firm, took a more cautious path. While it agreed that change is needed - recommending shareholders withhold votes from CEO Kathwari and board member David Sable - it backed only two of Bergeron's five candidates. That middle-ground position could prove decisive when shareholders cast ballots next week.

Bergeron, holding a 5.2% stake, cites concerns over the company's declining performance and shareholder returns. His slate includes Anna Brockway, Kristine E. Miller, Steve Oblak, and Stefanie Tsen Ward, all with experience in home furnishings, retail, and digital commerce. Bergeron has argued that he and his director candidates can restore profitable growth and potentially triple shareholder value over three years.

A Decade of Unfulfilled Promises

Glass Lewis didn't mince words in its assessment of Ethan Allen's trajectory. The firm described the company as "an underperformer over short, medium and long periods" and said incumbent management and directors had overseen "almost continuous structural deterioration and an apparently increasingly risky capital program".

The criticism echoes concerns ISS itself raised more than a decade ago. ISS identified many of Ethan Allen's fundamental challenges in 2015 - more than a decade later, the same issues remain unresolved. Back then, ISS cited revenue growth as the company's biggest challenge and warned about technological disruption. In 2026, those same problems persist.

Ethan Allen's stock price has lost more than a quarter of its value over the last 12 months and closed trading at $20.45 on Friday. The company, valued at roughly $515 million, has struggled to attract younger consumers and build the digital capabilities needed to compete with larger, more nimble rivals in the home furnishings space.

For its part, Ethan Allen's board has defended its record, pointing to what it says is a 49.1% five-year return while the peer median lost 42.7%, and highlighting $768 million returned to shareholders through dividends. The company argues it has completed a strategic repositioning and is driving growth through higher close rates and order values.

What Happens Next

Shareholders of record as of September 11 will vote virtually on November 4 at 11:00 a.m. Eastern. The outcome hinges on how institutional investors weigh the competing recommendations from the three major proxy firms.

A clean sweep by Bergeron would install an entirely new board and almost certainly lead to the departure of Kathwari, who has led the company for decades. A split decision could leave Ethan Allen with a divided board and an unclear mandate for change. And if incumbents prevail, the pressure on management to deliver tangible results will only intensify.

One wild card: Bergeron has publicly called on the company to release its fiscal first-quarter 2027 results before the vote, a departure from typical disclosure timing. Whether those numbers surface - and what they show - could shift momentum in the final days before shareholders decide who gets to steer this American furniture icon into its second century.