Elliott calls for Southwest Special Conference to be convened “as early as next week” | Wilnesh News

Elliott Management said Tuesday it will Southwest Airlines “as soon as next week,” after the company proposed a sweeping board shakeup in hopes of avoiding a proxy fight.

The move comes days ahead of the airline’s investor meeting, where it is expected to unveil improvements and operational changes. Elliott is seeking to oust Chief Executive Bob Jordan and Executive Chairman Gary Kelly, who has pledged to step down in 2025. and a 10-member list of directors composed of former regulators or government officials.

“We believe that capable new leaders should chart a path forward for Southwest through a thoughtful process,” Elliott partner John Pike and portfolio manager Bobby Xu said in a letter to shareholders.

“We don’t Supports the company’s current course, which has been haphazardly set by a group of executives in an entirely self-protective manner,” Pike and Xu wrote.

Southwest’s shareholder meeting is usually scheduled for May, but Elliott called for a special meeting in hopes of electing new directors much earlier than that. It will take several months for both sides to win over shareholder support, during which time a settlement is always possible.

Elliott said Southwest’s advisers were using so-called “false record dates” to limit the number of shareholders eligible to vote.

Southwest Airlines in July unveiled a major change to its more than 50-year-old business model: It will soon abandon open seating in assigned seats, offer seats with more legroom and higher fares, and start operating red-eye flights. Last week, chief operating officer Andrew Watterson warned staff to be prepared for more “tough decisions” as the airline struggles to restore profits as it faces rising costs and shifting travel patterns. .

The company does not plan to furlough employees but may cut operations in certain cities and offer employees the opportunity to move to other bases, according to a person familiar with the matter.

Southwest Airlines will release a routine schedule update on Wednesday that will show flights through early June. Earlier this month, Kelly said he would resign following Southwest’s shareholder meeting next spring.

The Brotherhood of Aircraft Machinists, which represents Southwest machinists and has met with Elliott, said last week that the activist investor “made it clear that the vision for Southwest’s turnaround is that Robert Jordan will not continue as CEO, If Elliott can exert enough influence on the board,” other executives are likely to be replaced. “

“The need for change is urgent, and we may make a request for a special meeting as soon as next week,” Pike and Xu said.

Southwest Airlines did not immediately respond to a request for comment.