DALLAS (WBAP/KLIF News ) – After months of turmoil, Southwest Airlines announced Thursday that it reached an agreement with activist investor group Elliott Management.
The deal comes with some major changes including the accelerated retirement of former CEO and now executive chairman Gary Kelly, effective November 1.
The Dallas-based carrier will also appoint a new independent chairman of the board and reduce its board to thirteen members by Southwest’s Annual Shareholder Meeting 2025.
Five new directors have also been appointed.
“We are pleased to have reached a collaborative resolution with Elliott, continuing our Board refreshment with the addition of new directors who bring complementary skills and experience. I am confident this Board will continue to hold the leadership team accountable for executing its transformational plan and delivering financial performance. It has been the honor of my lifetime to work with our People and serve our Customers in making Southwest the leader it is today. I believe Southwest’s best days lie ahead under the vision and leadership of Bob Jordan and the oversight of this reconstituted Board,” said Kelly.
The fight began after Elliot purchased 11% of the carrier’s shares and were unhappy with Southwest’s financial performance, which struggled following the pandemic.
Elliott Partner John Pike and Portfolio Manager Bobby Xu said, “We are pleased to have come to an agreement with Southwest on the addition of six new directors that will enhance and revitalize its Board. They are all highly qualified and will bring diverse skills and backgrounds to the task of overseeing Southwest under the leadership of a new Board Chairman. 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. We are grateful to Southwest’s shareholders, labor groups, and leadership for their constructive engagement, and we look forward to a strengthened Southwest delivering on its full potential.”
Southwest made some key changes to its operations over the summer before the latest development.
The carrier announced open seating in July. It also touted a premium ticket option with more legroom and will offer customers redeye domestic flights beginning Valentine’s Day 2025.
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