Proxy advisory firm Glass Lewis recommended on Sunday, October 25, 2026, that Ethan Allen investors vote to replace all five of the company’s current directors. The recommendation supports a campaign led by investor Doug Bergeron and DGB Investments to overhaul the leadership of the home furnishing company, including CEO Farooq Kathwari.
The challenge comes as Ethan Allen, a furniture company valued at $515 million, faces a decline in market performance. Doug Bergeron and DGB Investments, which hold a 5.2% stake in the nearly 100-year-old firm, initiated the contest to install a new board. Bergeron has stated that his slate of candidates can restore growth and potentially triple shareholder value within three years.
Glass Lewis, which advises institutional investors on board elections, described Bergeron’s agenda as "credible and reasonably robust" in a report reviewed by Reuters. The firm stated that Ethan Allen has been an "underperformer" and criticized what it described as "muted accountability" and "operational backsliding" under the current board. Last week, Egan-Jones Proxy Services also issued a report supporting Bergeron’s full slate of candidates.
Ethan Allen has responded to leadership concerns by announcing a succession plan for the 82-year-old Kathwari, who has served as CEO for 38 years. The company stated it would name a successor by June 30, 2027, though Kathwari would remain CEO during the search and stay on the board until the 2027 annual meeting. Bergeron characterized this timeline as "too little, too late."
The conflict highlights a significant dispute over corporate governance and succession planning at a major U.S. retailer. With two of the three major proxy advisory firms—Glass Lewis and Egan-Jones—now backing the dissident slate, the pressure on incumbent management has increased. If Bergeron’s slate is elected, it would result in the immediate removal of a CEO who has led the company for nearly four decades, marking a total shift in operational control and digital strategy for the firm’s employees and partners.
The final decision rests with the shareholders, who are scheduled to vote on the director candidates on November 4, 2026. Institutional Shareholder Services (ISS), the largest U.S. proxy firm, has not yet released its recommendation, which often influences the final vote tally. The results of this election will determine whether Ethan Allen proceeds with its 2027 succession plan or immediately installs the new board members, who include executives with experience in luxury retail and corporate turnarounds.