Southwest Airlines has responded to Elliott’s request for a special shareholder meeting to remove eight board members and possibly replace CEO Bob Jordan. The airline called the proposal “unnecessary and disruptive to ongoing business transformation efforts” but stated it would carefully review the request in line with its fiduciary duties.
The news comes as Elliott Investment Management, the activist investor that has taken around 11% stake in 
Southwest Airlines
, takes a step it had signaled for weeks after concluding that the carrier’s recent executive changes fall short of achieving real improvement in revenue growth.
Striving towards a “constructive resolution”
In response to Elliott’s request for a special meeting, Southwest reiterated its commitment to reaching a constructive resolution with the activist investor.
Photo: Port of Oakland
One of the examples given by the airline was a provided settlement framework under which the board would interview Elliott’s candidates and appoint up to three to a reconstituted 13-member board. Southwest added that the board would be reduced to 12 members following Executive Chairman Gary Kelly’s retirement in 2025.
Additionally, the American low-cost giant noted that Elliott’s proposal to remove eight members of the board of directors and replace them with its own candidates appears intended to give Elliott complete control of the board. The airline’s statement reads:
“For Elliott’s part, its latest framework for settlement reflects its continuing interest in seeking effective control of both the Board and management, including by installing Robert Milton, former CEO of Air Canada and a member of Elliott’s Board slate, as Executive Chair of Southwest.”
On October 14, 2024, Elliott announced it had called a Special Meeting for December 10 after unsuccessful efforts to persuade Southwest Airlines’ management to implement executive changes. The meeting, according to Elliott, will allow shareholders to vote on an “independent, best-in-class slate of director nominees.”
Elliott’s slate of eight nominees includes former C-level executives from Ryanair, Virgin America, Air Canada, and WestJet, as well as senior leaders from other aviation and non-aviation companies and government agencies.
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Southwest’s transformation plan
In September 2024, Southwest announced a transformation plan and provided an update on its discussions with Elliott. The plan included a new three-year strategy aimed at driving revenue growth and returning the airline to profitability, along with plans to refresh its board. Southwest projected it would achieve approximately $4 billion in cumulative incremental EBIT contribution by 2027.
Photo: Austin Deppe | Shutterstock
Southwest added that the next phase of its board transformation includes six director retirements, Executive Chairman Kelly’s retirement, the anticipated appointment of three new directors, the naming of new committee chairs, and a new lead director.
However, the airline reiterated that CEO “Bob Jordan is the right leader to successfully execute Southwest’s plan.”
“The Board has high expectations for Jordan and the Leadership team and will continue to hold them accountable for delivering results.”
The board said that it “has advanced its commitment to refreshment and a strong skill composition” with the recent appointments of Robert Fornaro, former CEO of Spirit Airlines and AirTran Holdings, Rakesh Gangwal, co-founder of IndiGo and a former executive at US Airways and United Airlines, and Lisa Atherton, President and CEO of Bell.
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Gangwal has spent over $100 million and acquired a 0.6% stake in Southwest Airlines.