Summary
- Elliott Investment Management suggests new board members for Southwest Airlines for better performance.
- The 10 candidates proposed by Elliott have extensive industry experience.
- Southwest previously came up with a “poison pill” plan to prevent Elliott from gaining more shares in the company.
Another layer has been added to the fight between Southwest Airlines and Elliott Investment Management about how the carrier should be run. The investment firm has now suggested sweeping changes to the airline’s board, nominating the names of 10 candidates, who it feels will bring much more to the table due to their extensive industry experience.
Elliott Investment Management wants new board members
Elliott Investment Management L.P. (Elliott) has announced its intention to shake up
’ existing board by endorsing 10 new candidates it deems better suited for the positions.
Photo: Robin Guess | Shutterstock
Elliott has not minced words in the past to criticize the way Southwest is run and its poor performance in recent years. The firm released a statement that said,
“When nominated, these Candidates would give shareholders a choice between the Company’s existing Board, which has delivered poor returns for shareholders and has not held management accountable for Southwest’s unacceptable performance, or a new Board that brings relevant expertise, fresh thinking and accountability.”
Who are the 10 candidates?
Elliott has said that a lot of thought has gone into selecting the 10 candidates for the board, involving a “months-long global search for the best individuals.” The firm elaborated that the list includes four former airline CEOs and Deputy CEOs and six candidates with complementary expertise in technology, hospitality, consumer-focused businesses, labor relations, and regulatory oversight, among other things. They are:
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
Related
Southwest’s Revenue Outlook Cuts Prompt Further Criticism From Activist Investor Elliott Management
After disappointing second-quarter forecasts, Elliott is again calling for a shake-up in Southwest’s leadership.
Nancy Killefer, a former McKinsey Senior Partner in the firm’s Consumer and Retailing Practice and current Board member of Meta
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
Eash Sundaram, the former Chief Digital and Technology Officer of JetBlue
Patty Watson, the current EVP and Chief Information & Technology Officer at NCR Atleos and a longtime technology executive
Tug of war
Elliott has a 7% beneficial ownership of Southwest, and when derivatives are included, it increases to around 11%. The firm has suggested big changes in the company to drive revenues and profits up, including replacing the airline’s CEO Robert Jordan and Executive Chair Gary Kelly, who was CEO before Jordan.
Photo: Carlos Yudica | Shutterstock
Southwest’s revenue outlook cuts earlier this year drew further criticism from Elliott, further consolidating its belief that the airline requires an urgent shake-up in its business model and management.
Anticipating Elliott’s growing influence on the airline, Southwest
even came up with a “poison pill” shareholder rights plan
to prevent the firm from gaining more shares in the company. Jordan commented earlier this year that Southwest is taking steps to address its issues for business transformation, but that Elliott was not interested in having any meaningful conversation.
