Southwest Airlines has given in to demands from Elliott Investment Management after months of an ongoing battle and agreed to restructure board leadership in a new settlement.
Longtime CEO and executive chairman Gary Kelly and six directors will accelerate their retirements to Nov. 1. Kelly was previously set to leave in 2025 and the directors were going to leave after a November board meeting. David Cush, Sarah Feinberg, Dave Grissen, Gregg Saretsky and Patricia Watson also have been appointed as independent directors to the board of directors. All five are candidates from Elliott’s slate. Saretsky, Cush and three additional directors to be appointed by the board will be on the board’s finance committee, with Saretsky as chair.
CEO Bob Jordan seems to be safe after calls from Elliott for the company’s leader to be replaced.
“We are pleased to have reached a collaborative resolution with Elliott, continuing our Board refreshment with the addition of new directors who bring complementary skills and experience,” Kelly said in a release. “I am confident this board will continue to hold the leadership team accountable for executing its transformational plan and delivering financial performance.”
The activist investor also withdrew its request to call a special meeting of shareholders and no longer intends to nominate candidates to stand for election to the board.
Pierre Breber, former chief financial officer of Chevron, also has been appointed to the board. The new board will appoint a new independent chairman and will be reduced to 13 members as of Southwest’s 2025 Annual shareholder meeting. Kelly will assume the title of chairman emeritus after his departure.
“We are pleased to have come to an agreement with Southwest on the addition of six new directors that will enhance and revitalize its board,” John Pike, partner of Elliott and Bobby Xu, portfolio manager said in a release. “They are all highly qualified and will bring diverse skills and backgrounds to the task of overseeing Southwest under the leadership of a new board chairman.”
Elliott had recently unveiled a podcast to interview its board candidates.
More information is expected during the company’s quarterly earnings call Thursday.
This story will be updated.
