Southwest Airlines shareholders take action, nominate 8 directors and call for CEO removal

Elliott Investment Management, a prominent activist shareholder, has announced that it is calling for a special meeting of Southwest Airlines shareholders and has nominated eight candidates for the airline’s board of directors.

Holding an 11% stake, this hedge fund is advocating for a transformation in Southwest Airlines’ operational strategies and has initiated a campaign to oust CEO Bob Jordan and other top executives, attributing the airline’s underperformance to their leadership.

Elliott confirmed that it has requested the special shareholder meeting to be held on December 10, corroborating earlier media reports. However, Southwest Airlines has yet to respond.

Since the COVID-19 pandemic, Southwest Airlines has faced challenges in maintaining profitability. The airline has implemented various strategies to return to the black, including introducing seats with more legroom and abandoning its large open seating system.

Last month, Southwest launched several initiatives aimed at boosting its declining profits, including partnerships, customer vacation packages, and aircraft leasebacks.

Nevertheless, Elliott argues that the airline’s plans are filled with “long-term performance promises” and is calling for “the selection of more reliable leadership.”

Southwest Airlines, headquartered in Dallas, has seen its stock price drop by approximately 40% over the past three years, resulting in a market capitalization of around $18 billion. Although the stock rose about 20% last year, it still lagged behind industry peers. In contrast, Delta Airlines has surged nearly 50% in the last 12 months, while United Airlines has experienced an increase of over 50% during the same period.