Travelers check in at the Southwest counter at Hartsfield-Jackson Atlanta International Airport (ATL) in Atlanta, Georgia, US, Tuesday, July 23, 2024.
Elijah Novel | Bloomberg | Getty Images
Elliott Investment Management has called for a special meeting on Southwest Airlineswhich formalizes the launch of a long-standing proxy fight for control of the carrier’s board.
The activist wants the meeting date to be December 10, said Monday. Elliott also reduced the size of its board from 10 directors to eight, after Southwest reduced its board size from 15 to 12.
CNBC reported last month that Elliott was preparing to call a special meeting.
The Southwest campaign will be Elliott’s first US campaign since taking over Arconic in 2017.
Elliott owns 11% of the airline and is seeking the ouster of CEO Bob Jordan. It was also looking to oust executive chairman Gary Kelly, but the former CEO announced he would step down from the company’s board in a September issue that reduced Southwest’s board.
David Hess, who joined Southwest’s board in 2021, was also on Arconic’s board during his proxy battle with Elliott. Hess, whom Elliott intended to remove, eventually became CEO of the Alcoa spinoff shortly before the company settled with Elliott.
Elliott has never called a special meeting, Southwest has a higher approval rating compared to voting at a scheduled shareholder meeting. Elliott will have less than two months to solicit votes from large and small shareholders.
Southwest’s single largest shareholder, Artisan Partners, while not an activist investor, has publicly expressed its support for Elliott’s campaign.
Representatives for Southwest did not respond to a request for comment. The airline’s shares fell nearly 1% in early Monday trading on the news.
At an investor day on September 26, Southwest reiterated its plans to raise revenue, including adding seats with more legroom and ending its unassigned seating model. The company is located in Jordan.
Elliott dismissed Southwest’s plan, and Jordan responded: “For Elliott to call that plan hastily and imprudently, in my opinion, is wrong.”
Elliott is one of the world’s most active activist investors, raising challenges for companies including Salesforce again Starbucks.
“The nominees we put forward today are uniquely qualified to hold the company’s senior leadership accountable and ensure the company delivers better results,” Elliott partner John Pike and portfolio manager Bobby Xu said in a statement.
— CNBC’s Leslie Josephs contributed to this report.
Source link