Southwest Airlines (WN, Dallas Love Field) and activist investor Elliott Investment Management have reached a “cooperation” agreement, resulting in significant changes to the carrier’s board of directors and leadership, according to a filing lodged with the US Securities and Exchange Commission (SEC).

As part of the deal, Southwest has appointed five directors backed by Elliott, committed to reducing the board’s size, and agreed to accelerate the retirement of executive chairman Gary Kelly along with six other directors. In turn, Elliott has withdrawn its request to call a special shareholders’ meeting, while CEO Bob Jordan is allowed to keep his job.

Following the agreement signed on October 23, Southwest agreed to appoint David Cush, Sarah Feinberg, David Grissen, Gregg Saretsky, and Patricia Watson to the board, effective 2359L (0459Z) on November 1, 2024. Each will serve an initial term expiring at Southwest’s 2025 Annual Meeting. Additionally, Pierre Breber, a former CFO of Chevron, has been appointed as a new director.

The board’s size will be reduced to 15 members initially and further to 13 members following the 2025 meeting. The newly appointed directors will make up at least one-third of the members on each committee.

Southwest has also restructured its Finance Committee, naming Saretsky as chair, with Cush and three additional directors joining the committee.

Kelly, alongside six directors, agreed to accelerate their retirements to November 1. Originally, they were planning to step down after the airline’s annual meeting next year.

Some of the Elliott-backed directors have previous airline experience:

  • Cush was CEO of Virgin America from 2007 to 2016;
  • Saretsky was CEO of WestJet from 2010 to 2018;
  • Feinberg was interim president of the New York City Transit Authority from 2020 to 2021;
  • Grissen was group president of Marriott International;
  • Watson has been chief information and technology officer at retail bank NCR Atleos since October 2023.

“We believe the strategic changes Southwest has announced since we commenced our engagement, together with the new independent directors and governance improvements, will position the company to enhance business performance, drive operational execution, and evaluate additional changes to create long-term shareholder value,” Elliott partner John Pike commented in a news release.

Rakesh Gangwal, who was appointed Southwest Airlines director this summer, said that a critical priority for the newly constituted board is “to coalesce as a functional body for the benefit of Southwest Airlines and work closely with Bob Jordan to preserve the company’s unique business model and culture.”