Southwest Appoints 6 New Directors in Settlement With Elliott

24.10.2024 - 16:09 / skift.com / Gary Kelly / Bob Jordan / Elliott Management / Elliott Investment Management / Meghna Maharishi / John Pike / Bobby Xu

Southwest announced Thursday the appointment of six new directors to its board as part of a settlement with activist investor Elliott Investment Management. 

Of the six directors, five are Elliott’s picks. The list includes:

Southwest also said chairman Gary Kelly will retire earlier, now on November 1 with the other outgoing directors. The board plans to appoint a new independent chairman. 

Earlier this week, multiple outlets reported that Elliott and Southwest were in talks for a settlement after the hedge fund called for a special meeting on December 10. Those talks were said to include board representation for Elliott. 

“We are pleased to have reached a collaborative resolution with Elliott, continuing our Board refreshment with the addition of new directors who bring complementary skills and experience,” Kelly said in a statement. 

The appointment of the new directors ends Southwest’s months-long battle with Elliott, which was poised to turn into a proxy fight. 

With the settlement, it looks like Southwest CEO Bob Jordan will keep his job. Elliott had long been calling for Jordan’s resignation as it argued a leadership change at Southwest would restore its profitability. Southwest’s board previously said Jordan had its full support. 

Elliott has now withdrawn its request for a December 10 special meeting. 

“We believe the strategic changes Southwest has announced since we commenced our engagement, together with the new independent directors and governance improvements, will position the Company to enhance business performance, drive operational execution and evaluate additional changes to create long-term shareholder value,” said Elliott partner John Pike and portfolio manager Bobby Xu in a statement. 

Southwest CEO Bob Jordan is due to speak at the Skift Aviation Forum in Dallas on November 12. Click here to see the full agenda and to buy your ticket.

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