Ethan Allen shareholder Bergeron criticizes $3 special dividend

Doug Bergeron, a 5.0% beneficial owner of Ethan Allen Interiors Inc. (NYSE: ETD), issued a statement criticizing the company's announcement of a $3.00 per share special cash dividend, calling it an attempt to deflect attention from a contested board election.

Bergeron, through his investment vehicle DGB Investment, Inc., has nominated a slate of director candidates ahead of Ethan Allen's 2026 annual stockholder meeting. He contends the dividend announcement, made Aug. 19, 2026, is a reactive measure rather than evidence of disciplined capital allocation.

In his statement, Bergeron said Ethan Allen's reported advertising spend remains below every year from 2006 through 2021, and is roughly half the level of premium furniture peers as a percentage of sales, despite the company citing 13% annual increases in marketing spend over the past two years.

Bergeron also noted that Ethan Allen's Board reduced its size from six to five directors in January 2026, a change he said was disclosed to his counsel only upon direct inquiry, two weeks after he submitted his director nominations. He argued the reduction leaves just four independent directors, none of whom he claims have meaningful experience in retail, furniture, luxury goods, or e-commerce.

He added that Chairman and CEO Farooq Kathwari, who has led the company for 38 years and beneficially owns approximately 8.4% of outstanding shares, would collect more than $6 million from the special dividend together with his family and related entities.

DGB Investment and Bergeron intend to file a preliminary proxy statement with the Securities and Exchange Commission in connection with the 2026 annual meeting. As of the statement date, Bergeron beneficially owns 1,275,000 shares of Ethan Allen common stock across DGB Investment, a personal residence trust, and a family trust.

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