What's happened
Southwest Airlines will see significant board changes, with six directors stepping down and four new independent directors expected to be appointed. This follows pressure from Elliott Management, which has acquired a 10% stake and is advocating for leadership changes, including the ouster of CEO Bob Jordan.
Why it matters
What the papers say
According to the New York Times, the board expressed unanimous support for CEO Bob Jordan, stating, "Bob has a proven track record over decades." In contrast, Elliott Management has been vocal about its dissatisfaction, emphasizing the need for "thoughtful, deliberate change at Southwest." The Axios report highlights that while the board's changes are significant, Elliott's demands for Jordan's ouster remain unmet, indicating ongoing tensions. The NY Post notes that Elliott's influence is growing, as it has built a 10% stake and is advocating for a complete overhaul of the board, which could lead to more substantial changes if the airline's performance does not improve.
How we got here
Elliott Management has criticized Southwest's management for a steep decline in stock price and operational issues, including a major flight cancellation incident in December 2022. The hedge fund's involvement has prompted discussions about board restructuring and leadership changes.
Common question
More on these topics
-
Southwest Airlines Co. is a major American airline headquartered in Dallas, Texas, and is the world's largest low-cost carrier.
-
Gary Kelly may refer to:
Gary C. Kelly (born 1955), Chairman and former CEO of Southwest Airlines
Gary Kelly (footballer, born 1966), Irish football goalkeeper
Gary Kelly (footballer, born 1974), Irish footballer
Gary Kelly (bowls) (born 1989), Northern.