Southwest Airlines will renew its board next year and its chairman will retire, but the company plans to keep CEO Robert Jordan after a meeting with hedge fund Elliott Investment Management, which has sought a leadership reshuffle at the airline that includes Jordan…
Southwest Airlines will renew its board and its chairman will retire next year, but it plans to keep CEO Robert Jordan after a meeting with hedge fund Elliott Investment Managementwho was seeking a leadership change at the airline that would also involve Jordan being fired.
Southwest said Tuesday that six directors will retire from its board in November and that it plans to appoint four new directors, including candidates nominated by Elliott.
Elliott, the fund led by billionaire investor Paul Singer, has built up a 10% stake in recent weeks and has advocated for changes it says will improve Southwest’s financial performance and stock price. The two sides met Monday.
Elliott blames Southwest’s management for the airline’s share price dropping by more than half in three years. The hedge fund wanted replace Jordan who has been CEO and chairman since early 2022 Gary Kellythe airline’s previous CEO. Southwest said Tuesday that Kelly has agreed to step down after the company’s annual meeting next year.
Elliott alleges that Southwest leaders failed to adapt to changing customer preferences and modernize Southwest’s technology, contributing to a massive flight cancellation in December 2022 that cost the airline more than $1 billion.
Shares of Southwest Airlines Co. rose slightly before the opening bell on Tuesday.