Update Oct. 15, 1:15pm ET: This article has been updated from
its original version to add Southwest's response, below.
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"Elliott's Special Meeting request is unnecessary and
inappropriate considering the extreme nature of Elliott's demands,"
Southwest said Monday in a statement. "The timing of Elliott's request to
apparently pursue Board control appears designed to maximize disruption of
Southwest's execution of its important business transformation underway as we
approach one of the busiest travel periods of the year. Elliott's actions
highlight its lack of understanding of Southwest's business and its insatiable
need to put its own interests ahead of those of all Shareholders."
Southwest added that shareholders want the carrier to engage
with Elliott and "seek to avoid a protracted dispute," and that it
made "every effort to reach a constructive resolution."
"Unfortunately, Elliott remains entrenched in demanding
control of the Board, while continuing to block its Director candidates from
being interviewed by the Board's Nominating and Corporate Governance Committee,
making it impossible to find a constructive resolution," Southwest said.
"The company was encouraged that Elliott might be turning the page ahead
of Investor Day, when it requested a preview of Southwest's Investor Day
materials as a condition to engaging in settlement discussions. After providing
Elliott a detailed, in-person preview of the Company's plan more than a week
[in advance], Elliott failed to provide input and continued its public attacks
ahead of and following Investor Day."
The carrier said the board will carefully review the special
meeting request in accordance with its fiduciary duties, Texas law and the
company's bylaws, including Elliott's stated request to hold the meeting on
Dec. 10, 2024.
Elliott on Tuesday announced it was launching its
"Stonger Southwest" podcast, which will feature one-on-one
conversations with its director nominees.
Original article follows.
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Elliott Management has carried through on its previous vow to call for a special meeting of Southwest Airlines shareholders, the investment company announced Monday. Elliott requested a Dec. 10 meeting for a vote to replace eight of the carrier's current board members.
Those eight were part of the 10 nominees the company originally named in August and include former Virgin America CEO and former American Airlines SVP of global sales David Cush, former Marriott International group president for the Americas Dave Grissen, former Air Canada CEO Robert Milton and former WestJet president and CEO Gregg Saretsky.
The remaining four are Michael Cawley, former deputy CEO, COO and CFO of Ryanair, Sarah Feinberg, former chief of staff to U.S. Department of Transportation Secretary Anthony Foxx, Josh Gotbaum, the former chapter 11 trustee of Hawaiian Airlines, and Patty Watson, NCR Atleos EVP and chief information and technology officer.
The two not included in Monday's announcement are Nancy Killefer, a former Obama administration chief performance officer and McKinsey & Co. director, and Eash Sundaram, a former JetBlue chief digital and technology officer.
"We are taking this step today because the need for improved oversight at Southwest has never been more urgent," Elliott partner John Pike and portfolio manager Bobby Xu wrote in a statement. "Following Elliott's public push for changes, Southwest has responded with a series of long-overdue strategic and corporate-governance initiatives, promising that better performance will follow. However, Southwest's shareholders have heard these sorts of promises before, and what they need today, at the outset of this attempted turnaround, is an experienced, highly qualified Board to oversee the changes and ensure successful execution."
Elliott wants to replace eight current Southwest directors: board chairman and former CEO Gary Kelly, Douglas Brooks, Eduardo Conrado, William Cunningham, Thomas Gilligan, David Hess, Elaine Mendoza and Jill Soltau.
Southwest in September announced a board "refreshment," in part as a response to Elliott's recommended board slate, in which three of the current members already agreed to leave: Kelly, after the carrier's 2025 annual meeting, and Gilligan and Soltau, after the company's scheduled board meeting in November.
Other members set to retire in November include David Biegler, the compensation committee chairman; Veronica Biggins, the nominating and corporate governance committee chair; Sen. Roy Blunt; and William Cunningham, the lead director.
"Absent a thorough reconstitution of its Board, the story of Southwest will remain one of empty promises and unfulfilled potential," Pike and Xu wrote. "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 also has called for the replacement of Southwest CEO Bob Jordan, but did not mention that in today's announcement.
The carrier also held its investor day on Sept. 26 and provided additional details on the changes it had previously announced, which include assigned seats and a premium cabin. Jordan also had addressed the Elliott proxy battle by saying that Southwest remained willing to work with the company, but that "Elliott has demonstrate little or no interest in collaborating with Southwest," he said.
Southwest did not immediately respond Monday to a request for comment.
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