Elliott Management to Nominate Directors at Southwest

DALLAS – Elliott Investment Management has announced a proxy fight against Southwest Airlines, aiming to nominate ten candidates for the airline's 15-member board. The hedge fund stated that this move is crucial for implementing necessary changes at Southwest, which has struggled to keep pace with competitors. In response, Southwest Airlines expressed disappointment, claiming it had sought to engage with Elliott to address concerns but was met with refusal. The airline noted that Elliott had previously agreed to a meeting to discuss collaborative solutions but instead chose to publicly announce its intentions. Southwest Airlines' shares saw a slight increase of over 1% prior to the market opening on Wednesday, following Elliott's announcement. The hedge fund has acquired approximately an 8% stake in the airline, which has experienced a 12% decline in stock value this year, contrasting with a 14% gain in the S&P 500. Elliott has criticized the current leadership, specifically CEO Robert Jordan and Chairman Gary Kelly, for the airline's underperformance relative to industry peers. In a bid to enhance revenue, Southwest recently revealed plans to implement significant changes, including the introduction of assigned seating and premium options for extra legroom. Elliott's proposed board candidates include former executives from major airlines and transportation officials, reflecting its strategy of advocating for management changes in underperforming companies. The hedge fund is preparing to call a special meeting for a shareholder vote, signaling a determined push for leadership overhaul at Southwest Airlines.