Activist investor Elliott Investment Management L.P. has called for a special shareholder meeting at Southwest Airlines (WN, Dallas Love Field) on December 10, 2024, to discuss its proposals, including the removal of eight members from the airline’s Board of Directors.
In response, Southwest issued a press release criticising Elliott’s request, stating that its proposed replacement of eight board members with its own candidates is “without cause” and would effectively give Elliott board control.
“Elliott’s special meeting request is unnecessary and inappropriate considering the extreme nature of Elliott’s demands,” Southwest said, arguing that the move would disrupt its business transformation during one of the busiest travel periods of the year.
Southwest recently announced several leadership changes, including the retirement of executive chairman Gary C. Kelly and six additional directors. The airline has also rolled out product changes such as assigned seating, extra-legroom seats, new airline partnerships, and modifications to the boarding process. However, Elliott, which owns an 11% stake in Southwest (worth approximately USD1.9 billion), remains unsatisfied and is also pushing for the removal of CEO Bob Jordan, despite opposition from other shareholders.
“Unfortunately, Elliott remains entrenched in demanding control of the Board [...], making it impossible to find a constructive resolution. For nearly four months, Elliott has failed to offer any substantive feedback on Southwest’s strategic plan,” the airline said. It added that the board will review the special meeting request.
Elliott is well-known for its activist approach, having forced leadership changes at companies like Starbucks, Crown Castle, NRG Energy, and Goodyear Tire & Rubber. According to CNBC, Elliott has two months to secure enough votes from Southwest’s shareholders and has already gained support from Artisan Partners, the airline’s tenth-largest shareholder, holding 1.8% of the company’s shares.
