Elliott Investment Management is calling for a special stockholder meeting to take the fight to Southwest Airlines to investors and vote on new director candidates who will ultimately steer the company's strategy.
Elliott has taken the highly unusual step of convening the meeting, which it has been telegraphing for weeks after concluding that the airline's recent changes did not guarantee real improvements. It's something.
Southwest, which has a market capitalization of $18.45 billion, did not respond to a Reuters request for comment.
Elliott, which was founded by Paul Singer and manages about $70 billion in assets and owns 10% of Southwest Airlines' common stock, has replaced some of its board members and replaced CEO Bob Jordan. The company has been pushing for months to fire him and review its strategy to improve its financial performance. and push up stock prices.
The hedge fund announced on Monday that it had formally called for a special general meeting in December and submitted proposals to replace eight directors and take control of the board. The company's last annual general meeting was held in May 2024.
“Without a thorough reconstitution of the board, Southwest's story is one of empty promises and unrealized potential,” Elliott partner John Pike and portfolio manager Bobby Hsu said in a statement. It will remain in place,” he said.
The board currently has 15 members, which will be reduced to 13 next month and further reduced to 12 at next year's annual general meeting.
Southwest Airlines, which has struggled to maintain profits since the coronavirus pandemic, has taken steps to turn its business around, including adding seats with extra legroom and eliminating its signature open seating system. We are taking measures to achieve this goal.
Last month, the airline Announcement of several initiatives Partnerships, vacation packages for customers, and aircraft sale-leasebacks are all part of the deal to offset declining profits.
In addition, the company added new directors at the beginning of this year, with six directors taking office in November, and executive chairman Gary Kelly announced that he would retire in May next year.
Southwest Airlines stock has fallen 42% over the past five years but is up 8% in 2024, and was trading 0.6% lower at $30.45 as of Monday morning.
First reported by Bloomberg The news was announced Monday, before Elliott released his statement.
Mr Elliott, who met with the airline last month, previously said the company's policies were “haphazard” and the executive group was operating in “complete self-preservation mode”.
The eight director candidates proposed by hedge funds are industry and industry leaders, including Michael Corley, former deputy CEO of Ryanair, and David Kush, former CEO of Virgin America. These are executives with experience in regulatory agencies.
Although the hedge fund did not explicitly target Mr. Jordan's ouster as a candidate, people familiar with Mr. Elliott's thinking said that his company, including its CEO, who had been saying for months that Mr. Elliott must resign, The company continues to work on appointing new executives.
Since announcing its position in Southwest several months ago, Elliott has stuck to a three-pronged strategy. First, the company wants to refresh its board of directors with independent industry experts, paving the way for its second and third goals of holding management accountable and ultimately driving improved financial performance. said the people.
