Southwest Airlines’ minority investor Elliott Investment Management has formally requested a special shareholder meting to be held in early December, in its fight to oust chief executive Bob Jordan and much of the company’s board of directors.
Elliott, which holds 11% of Dallas-based Southwest’s shares, has been in an acrimonious public row with the carrier about the company’s strategy and future plans.
“We are taking this step today because the need for improved oversight at Southwest has never been more urgent,” Elliott says. “Following Elliott’s public push for changes, Southwest has responded with a series of long-overdue strategic and corporate-governance initiatives, promising that better performance will follow.”
Elliott has put forward a list of eight potential board nominees, which it hopes to have elected on 10 December. It’s largely the same list that Elliott proposed in August, when it said that Southwest’s current board was “profoundly out of touch” with investors.
The group includes former airline top executives Michael Cawley (Ryanair), David Cush (Virgin America), Robert Milton (Air Canada) and Gregg Saretsky (WestJet). Former US Department of Transportation official Sarah Feinberg, ex-Mariott International group president Dave Grissen, as well as external advisor Josh Gotbaum and technology executive Patty Watson round out the Elliott nominees.
In September, Southwest signalled it would partially capitulate, announcing the resignation of six board members and saying that executive chairman and former chief executive Gary Kelly will retire following Southwest’s annual meeting in 2025. But the board reaffirmed its confidence in current chief executive Jordan.
Elliott had in June called on Southwest’s leaders to be replaced, while adding that the business “represents the most compelling airline turnaround opportunity in the last two decades”.
Southwest and Elliott have been in an increasingly heated war of words in recent months, with the airline’s management under heavy fire following a series of blunders earlier this year.
On 25 September, the day before Southwest held an investor day event, Elliott published a strongly worded letter to fellow investors accusing the Southwest board of incompetence. At the investor day, chief executive Bob Jordan responded, saying Elliot’s criticism of airline management is “inane”.
Southwest has detailed a broad transformation plan which includes breaking away from its decades-old open seating model in 2026, forming partnerships with international carriers and installing new “premium” coach seats in its aircraft starting next year.
But Elliott has not been appeased by these moves, saying, “Southwest’s shareholders have heard these sorts of promises before” and that the company needs an “experienced, highly-qualified board” to oversee necessary and critical changes in the company’s management and the way it does business.
“Today, after exhaustive attempts to persuade Southwest to implement the necessary governance changes, we are formally calling a special meeting to give shareholders the opportunity to elect a completely independent, best-in-class slate of director nominees,” Elliott says. “Absent a thorough reconstitution of its board, the story of Southwest will remain one of empty promises and unfulfilled potential.”
“It is time for shareholders’ voices to be heard, so that Southwest can finally deliver on its full potential for customers, employees and shareholders alike,” the investor says. “Electing a world-class slate of exceptional director candidates is the essential first step to making this happen.”
