Elliott Management Seeks Control of Southwest Airlines Board

Activist hedge fund Elliott Investment Management has initiated a campaign to take control of the board at Southwest Airlines, aiming to oust CEO Robert Jordan and enhance the airline's performance. Elliott is proposing to replace 10 of the 15 current directors, intensifying a proxy battle over the airline's leadership and strategic direction. The firm criticized the existing board for lacking independent directors with airline experience prior to its intervention in June. In a statement to CNBC, Elliott announced plans to convene a special meeting for shareholders to vote on its proposed candidates. Meanwhile, Southwest Airlines has indicated that it will assess Elliott's nominees as part of its ongoing board refreshment process. The airline's stock has seen a significant decline, dropping 24% over the past year, as it attempts to implement a turnaround strategy that includes enhancing seating options and appointing new board members. Elliott holds approximately an 11% stake in Southwest, including derivatives, and has expressed intentions to replace both Jordan and executive chair Gary Kelly. However, Jordan has stated that Elliott has not engaged in meaningful discussions regarding the airline's future. Analysts from Jefferies suggest that investors are unlikely to support a leadership change without a clear plan for moving forward, especially given Southwest's recent efforts to adapt and improve. The hedge fund's proposed board candidates do not include any of its own employees, reflecting a strategy aimed at bringing in external expertise to address the airline's challenges.