Elliott Investment Management announced it has delivered a request to call a special meeting of Southwest Airlines shareholders. The company, which has an 11% share of the carrier, has been seeking changes in the airline’s policies and in its board of directors. It also offered a slate of eight candidates to join Southwest’s board, including:
- Michael Cawley, the former deputy CEO, COO and CFO of Ryanair
- David Cush, the former CEO of Virgin America
- Sarah Feinberg, a former senior official at the Department of Transportation and former head of the Federal Railroad Administration
- Hon. Josh Gotbaum, a longtime advisor to companies and labor groups and the former Chapter 11 trustee of Hawaiian Airlines
- Dave Grissen, the former group president of Marriott International
- Robert Milton, the former CEO of Air Canada and ACE Aviation Holdings and the former chairman of United Airlines
- Gregg Saretsky, the former CEO of WestJet
- Patty Watson, the current chief information and technology officer at NCR Atleos and a longtime technology executive
Elliott has also submitted a proposal for the removal of eight current Southwest directors: Douglas Brooks, Eduardo Conrado, William Cunningham, Thomas Gilligan, David Hess, Gary Kelly, Elaine Mendoza and Jill Soltau.
In a statement on behalf of Elliott partner John Pike and portfolio manager Bobby Xu, the company said that “after exhaustive attempts to persuade Southwest to implement the necessary governance changes, we are formally calling for a special meeting to give shareholders the opportunity to elect a completely independent, best-in-class slate of director nominees.” Without a thorough reconstitution of its board, said the statement, “the story of Southwest will remain one of empty promises and unfulfilled potential.”
The statement said Elliott is taking this step because the need for improved oversight at Southwest “has never been more urgent.” Following Elliott’s public push for changes, it said, Southwest has responded with a series of long-overdue strategic and corporate-governance initiatives, promising that better performance will follow.
However, said the statement, “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.”
The statement strongly urged Southwest’s shareholders — particularly those who engage in share lending or authorize their brokers to engage in share lending — to work with their banks and brokers as soon as possible to confirm that they will be able to vote all their Southwest shares.
