Elliott asks for December special meeting at Southwest, cuts board slate
Travelers check in at a Southwest counter at Hartsfield-Jackson Atlanta International Airport (ATL) in Atlanta, Georgia, US, on Tuesday, July 23, 2024.
Elijah Nouvelage | Bloomberg | Getty Images
Elliott Investment Management has requested a special meeting at Southwest Airlines, formalizing the launch of a long-signaled proxy fight for control of the carrier’s board.
The activist is seeking a meeting date of Dec. 10, it said Monday. Elliott has also trimmed the size of its board slate from 10 director candidates to eight, after Southwest shrunk its board size from 15 to 12.
CNBC reported last month that Elliott was preparing to call a special meeting.
Southwest’s campaign will be Elliott’s first U.S. proxy fight since it took on Arconic in 2017.
Elliott has an 11% stake in the airline and is seeking the ouster of CEO Bob Jordan. It had also been looking to remove executive chairman Gary Kelly, but the former CEO announced he would step off the company’s board in the September shuffle that shrank Southwest’s board.
David Hess, who joined Southwest’s board in 2021, was also on the board of Arconic in the midst of its proxy fight with Elliott. Hess, whom Elliott is targeting for removal, ultimately became CEO of the Alcoa spinoff shortly before the company settled with Elliott.
Elliott has never before called for a special meeting, which at Southwest carries a higher threshold of approval compared with voting at a regularly scheduled shareholder meeting. Elliott will have a little less than two months to solicit votes from shareholders large and small.
One top Southwest shareholder, Artisan Partners, while not an activist investor, has already publicly expressed its support for Elliott’s campaign.
Southwest representatives did not immediately respond to a request for comment. The airline’s shares rose roughly 1% in premarket trading on the news.
At an investor day Sept. 26, Southwest reiterated its plans to drum up revenue, including adding seats with extra legroom and ending its unassigned seating model. The company has stood by Jordan.
Elliott dismissed Southwest’s strategy, and Jordan fired back: “For Elliott to call that plan rushed and haphazard in my opinion, is inane.”
Elliott is one of the most prolific activist investors in the world, mounting challenges at companies including Salesforce and Starbucks.
“The nominees we have put forward today are uniquely qualified to hold the company’s executive leadership accountable and ensure that the company delivers improved results,” Elliott partner John Pike and portfolio manager Bobby Xu said in a statement.
— CNBC’s Leslie Josephs contributed to this report.
