Key Summary: On July 8, 2024, Elliott Investment Management L.P. called for a leadership overhaul at Southwest Airlines due to ongoing underperformance and dissatisfaction, urging the Board to reconstitute with independent airline executives and source a new CEO externally. Following this, Elliott proposed a fundamental strategy change and announced plans to nominate ten board candidates, criticizing current management for poor performance. On October 14, Elliott requested a Special Meeting of Shareholders on December 10, 2024, to elect eight independent nominees and remove eight current directors, stressing the urgent need for governance reform.On October 23, 2024, Elliott Investment Management entered into a cooperation agreement with the company.Market Cap: $17 billion| Southwest Airlines Co. operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets.
On July 8, 2024, Elliott Investment Management L.P. urged the Board to implement a leadership overhaul due to sustained underperformance and shareholder dissatisfaction. Following extensive feedback from shareholders and industry stakeholders, Elliott criticized recent actions by the Board, such as reducing revenue guidance and adopting a "poison pill" to thwart Elliott's stake increase. Elliott advocated for immediate Board reconstitution with independent, experienced airline executives and a new CEO sourced externally.
On August 5, 2024, Elliott Investment Management L.P. stated its belief that the company needed fundamental changes to improve its strategy and performance. They proposed reconstituting the Board, enhancing the leadership team by finding a new CEO and independent Board Chair, and conducting a comprehensive business review to develop and implement a new strategy to achieve industry-leading performance. Source
On August 13, 2024, Elliott Investment Management L.P. (11%) stated that it intends to nominate ten candidates to the Board. This move follows Elliott’s call for board reconstitution, new leadership installation, and a comprehensive business review to restore Southwest’s industry-leading position. Highlighting ongoing poor performance and board resistance, Elliott emphasizes the need for change. Source
On August 26, 2024, Elliott Investment Management sent a letter to the shareholders, expressing concerns over the company's declining performance due to poor leadership by CEO Bob Jordan and Executive Chairman Gary Kelly. Elliott criticized the management's entrenchment tactics and emphasized the need for a transparent and credible process to reinvigorate the company.
On September 10, 2024, Elliott Investment Management praised the Board for resigning seven directors, noting it as unprecedented. They emphasized the need for further changes and expressed confidence in their nominees to guide the airline forward. Source
On September 24, 2024, Elliott Investment Management (10.2%) sent a second open letter to the shareholders, announcing their intent to call a special meeting in the coming weeks due to the urgent need for leadership change. They accused Southwest of obstructing this change through defensive actions, including setting "false record dates" to disenfranchise shareholders. Elliott urges shareholders to ensure their voting rights by recalling any loaned shares before Southwest's next record date on October 7.
On September 26, 2024, Elliott Investment Management criticized Southwest Airlines during its Investor Day, stating that CEO Bob Jordan has failed to deliver acceptable financial results and is unfit to lead the company’s proposed changes. They highlighted past promises of profitability enhancements that resulted in deterioration, questioning the board's support for Jordan. Elliott expressed determination to call a special meeting for shareholders to advocate for an independent board capable of improving the company's performance.
On October 14, 2024, Elliott Investment Management, holding approximately 11% of Southwest Airlines Co. (NYSE: LUV), announced its request for a Special Meeting of Shareholders on December 10, 2024. Elliott aims to elect eight independent director nominees and remove eight current directors, emphasizing the urgent need for governance changes at Southwest. Source
On October 23, 2024, Elliott Investment Management entered into a cooperation agreement with the company and pursuant to it, the company announced the appointment of six new independent directors—David Cush, Sarah Feinberg, Dave Grissen, Gregg Saretsky, Patricia Watson, and Pierre Breber—effective November 1, 2024. Additionally, Elliott has withdrawn its request for a Special Meeting of Shareholders and will not nominate candidates for the Board.
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