Activist investor is offering Ethan Allen's longtime CEO an honorary advisory role

DGB Investments is offering Ethan Allen Interiors Chairman and CEO Farooq Kathwari the title of board chairman emeritus as the activist investor presses ahead with a proxy challenge to replace the furniture company’s entire board, according to Bloomberg.

In a statement released Tuesday, DGB said the honorary role is meant to acknowledge Kathwari's legacy at the company while helping to ease any leadership handover should its proxy campaign prove successful. DGB continues to seek the removal of all five board members, including Kathwari.

Kathwari took the helm at Ethan Allen in the late 1980s, holding both the chairman and CEO titles ever since. The company is already planning to name a new CEO by mid-2027 as part of a transition that Kathwari himself initiated. He nominated himself to the board and launched his own CEO search.

Douglas Bergeron, DGB’s founder, who made his stake in Ethan Allen public in August, called for Kathwari’s removal and a board overhaul, citing weak leadership as a drag on the company’s performance, according to Bloomberg. DGB owns roughly 5% of Ethan Allen.

The statement also provided access to an investor presentation outlining DGB’s plans for the company, covering operational and technology improvements, product and merchandising changes, and updates to digital and retail experiences, DGB said.

The showdown will arrive at Ethan Allen's annual meeting on Nov. 4, where the company has maintained that its slate of director candidates is well-qualified and that upending board membership mid-transition would be destabilizing.

Shares ended Monday's session at $20.32, placing Ethan Allen's total market capitalization at approximately $512 million. Representatives for Ethan Allen did not respond to requests for comment, according to Bloomberg.

Bergeron is based in Park City, Utah, and previously served as a co-managing partner at Hudson Executive Capital, according to Bloomberg.