Elliott Investment Management has publicly identified 10 potential nominees to Southwest Airlines’ board of directors, intensifying its call for changes to the airline’s senior management and inching closer to launching the proxy battle it has been hinting at.
Southwest’s Response
Southwest Airlines has made it clear that it will resist Elliott’s attempts to overhaul the board. The airline stated in response to Elliott’s actions that it has consistently sought constructive engagement in the best interest of all shareholders. Despite this, Elliott has brushed off these efforts and instead opted to publicly announce its intention to replace a majority of Southwest Airlines’ board.
Since June, Elliott has been advocating for the removal of Southwest CEO Bob Jordan. This call for change came after Elliott disclosed a $1.9 billion stake in the carrier, amounting to an 11% economic interest, and issued a proxy battle ultimatum. In spite of this, Jordan has expressed his determination to remain in his position.
Elliott has unveiled a list of potential board nominees, highlighting individuals with impressive backgrounds and expertise. The nominees include former industry leaders such as David Cush, Dave Grissen, Robert Milton, and Gregg Saretsky. Additionally, the list features Michael Cawley, Sarah Feinberg, Josh Gotbaum, Nancy Killefer, Eash Sundaram, and Patty Watson.
Elliott has defended its choice of nominees, stating that they were selected after a rigorous global search for individuals with the necessary skills to address Southwest’s current challenges and unlock the company’s potential. The investment firm criticized Southwest’s current board, claiming it has failed to deliver satisfactory returns for shareholders and hold management accountable for the airline’s underperformance.
In contrast, Southwest Airlines’ board has expressed confidence in the current leadership team’s ability to guide the company through its evolution and future growth. The board maintained that deliberate actions had been taken to enhance the expertise on the board to effectively address the airline’s needs.
Overall, Elliott Investment Management’s nomination of board members to Southwest Airlines has created a rift between the investment firm and the airline’s leadership. The ensuing proxy battle and potential board shake-up could have significant implications for the direction of Southwest Airlines and its future performance. It remains to be seen how this conflict will be resolved and what impact it will have on the airline industry as a whole.