Activist Investor Elliott Requests Special Meeting Of Southwest Shareholders

Seeking a “thorough reconstitution” of the Southwest Airlines board of directors, Elliott Investment Management has officially requested a Dec. 10 special meeting of shareholders, less than three weeks after the carrier laid out its plans for transformation.

The move follows “exhaustive attempts to persuade Southwest to implement the necessary governance changes,” writes Elliott, putting forward eight candidates for election. The activist investor has continually pushed for significant leadership change, including taking aim at CEO Bob Jordan. Half of the eight directors it now proposes for replacement are among those already stepping aside, in a refresh announced by departing executive chairman Gary Kelly in early September. Taking the board from 15 members down to 12, the changes followed feedback from a range of shareholders, noted Jordan during a Sept. 26 investor day.

“All of that was in response to our shareholder feedback; the one shareholder where we’ve not had engagement is Elliott, because they have not been willing to engage,” Jordan told press at the investor day event in Dallas. “They’ve been willing to issue press releases and take pot shots—about me, the plan, a whole variety of things—but they have literally not engaged.”

He added, “we have offered, as an example, to interview their board candidates ... as we add new board members, and they refuse to let us do even that.”

Making no mention of Jordan in its latest release, Elliott proposes the following for election to the board: Michael Cawley, former deputy CEO, COO and CFO of Ryanair; David Cush, former CEO of Virgin America; Sarah Feinberg, a former senior official at the U.S. Transportation Department and former head of the Federal Railroad Administration; Josh Gotbaum, the former chapter 11 trustee of Hawaiian Airlines; Dave Grissen, the former group president of Marriott International; Robert Milton, the former CEO of Air Canada and the former chairman of United Airlines; Gregg Saretsky, the former CEO of WestJet; and Patty Watson, the current EVP and chief information and technology officer at NCR Atleos. A previous list published by the fund had also proposed Nancy Killefer, a former McKinsey senior partner and current board member of Meta; and Eash Sundaram, the former chief digital and technology officer of JetBlue.

Alongside its nominations, Elliott called for the removal of Southwest directors Douglas Brooks, Eduardo Conrado, William Cunningham, Thomas Gilligan, David Hess, Gary Kelly, Elaine Mendoza and Jill Soltau—four of which are among the seven already stepping down. Cunningham, Gilligan, and Soltau will depart at a regularly scheduled board meeting in November, while Kelly is set to retire at the airline’s 2025 annual meeting in spring 2025.

“The nominees we have put forward today are uniquely qualified to hold the Company’s executive leadership accountable and ensure that the company delivers improved results,” wrote Elliott on Oct. 14. It first announced its large stake in June. 

“Southwest has responded with a series of long-overdue strategic and corporate-governance initiatives, promising that better performance will follow,” Elliott adds. “However, Southwest’s shareholders have heard these sorts of promises before, and what they need today, at the outset of this attempted turnaround, is an experienced, highly qualified board to oversee the changes and ensure successful execution.”

The carrier has added 10 new independent directors since late 2021, while five have retired, most recently appointing former CEO of Spirit Airlines and AirTran Holdings Bob Fornaro on Sept. 26.

Elliott has repeatedly warned of its intent to call a special meeting, stating that it remained determined to do so following Southwest’s recent investor day. During that event, management detailed initiatives aimed at adding roughly $4 billion to earnings before interest and taxes by 2027. The carrier plans to offer new products and services, cut costs, and increase operational efficiency to “usher in a new era of change, profitability, and industry leadership.”

Southwest did not immediately respond to requests for comment.