Vacationers examine in at a Southwest counter at Hartsfield-Jackson Atlanta Worldwide Airport (ATL) in Atlanta, Georgia, US, on Tuesday, July 23, 2024.
Elijah Nouvelage | Bloomberg | Getty Photographs
Elliott Funding Administration has requested a particular assembly at Southwest Airlines, formalizing the launch of a long-signaled proxy struggle for management of the provider’s board.
The activist is searching for a gathering date of Dec. 10, it mentioned Monday. Elliott has additionally trimmed the scale of its board slate from 10 director candidates to eight, after Southwest shrunk its board measurement from 15 to 12.
CNBC reported final month that Elliott was preparing to name a particular assembly.
Southwest’s marketing campaign will probably be Elliott’s first U.S. proxy struggle because it took on Arconic in 2017.
Elliott has an 11% stake within the airline and is searching for the ouster of CEO Bob Jordan. It had additionally been seeking to take away govt chairman Gary Kelly, however the former CEO introduced he would step off the company’s board within the September shuffle that shrank Southwest’s board.
David Hess, who joined Southwest’s board in 2021, was additionally on the board of Arconic within the midst of its proxy struggle with Elliott. Hess, whom Elliott is concentrating on for elimination, finally turned CEO of the Alcoa spinoff shortly earlier than the corporate settled with Elliott.
Elliott has by no means earlier than referred to as for a particular assembly, which at Southwest carries a better threshold of approval in contrast with voting at a recurrently scheduled shareholder assembly. Elliott could have rather less than two months to solicit votes from shareholders massive and small.
One high Southwest shareholder, Artisan Partners, whereas not an activist investor, has already publicly expressed its help for Elliott’s marketing campaign.
Southwest representatives didn’t reply to a request for remark. The airline’s shares slipped roughly 1% in Monday morning buying and selling on the information.
At an investor day Sept. 26, Southwest reiterated its plans to drum up income, together with including seats with further legroom and ending its unassigned seating mannequin. The corporate has stood by Jordan.
Elliott dismissed Southwest’s technique, and Jordan fired again: “For Elliott to name that plan rushed and haphazard for my part, is inane.”
Elliott is among the most prolific activist traders on this planet, mounting challenges at corporations together with Salesforce and Starbucks.
“The nominees we’ve put ahead right this moment are uniquely certified to carry the corporate’s govt management accountable and be certain that the corporate delivers improved outcomes,” Elliott associate John Pike and portfolio supervisor Bobby Xu mentioned in a press release.
— CNBC’s Leslie Josephs contributed to this report.
