Ethan Allen files proxy, urges vote against DGB board challenge

Ethan Allen Interiors Inc. (NYSE: ETD) filed its definitive proxy statement with the U.S. Securities and Exchange Commission on Sept. 24, 2026, ahead of its annual shareholder meeting scheduled for Nov. 4, 2026, in connection with a board control dispute with activist investor DGB Investment Inc.

DGB, which holds a 5.2% stake in the Danbury, Conn.-based furniture maker, is seeking to replace Ethan Allen's entire board and chief executive. The company is urging shareholders to vote for its five incumbent director nominees: M. Farooq Kathwari, David M. Sable, Tara I. Stacom, Maria Eugenia Casar and Cynthia Ekberg Tsai.

In a letter accompanying the proxy materials, the board cited a five-year total shareholder return of 49.1% through Sept. 21, 2026, compared with a peer group median of negative 42.7%. The company also reported gross margins above 59% for five consecutive fiscal years and an average operating margin of 12.8% over the past five years, which it said was more than double the proxy peer group average.

Ethan Allen reported $768 million in cumulative cash dividends paid to shareholders since its 1993 IPO, including a $3.00 per share special dividend announced in August 2026. As of June 30, 2026, the company held $187.5 million in cash and investments with no outstanding debt.

The board disclosed that it has engaged an executive search firm to identify a successor to Kathwari and committed to publicly naming a new chief executive no later than June 30, 2027, when his current contract is scheduled to end. Kathwari would remain as a non-executive director until the 2027 annual meeting.

The company stated that DGB has not provided a detailed operating plan and that its nominees lack direct experience overseeing a vertically integrated, designer-led manufacturer and retailer. DGB has not publicly responded to those characterizations in this filing.

Shareholders of record as of Sept. 11, 2026, are eligible to vote at the annual meeting.

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