Elliott Investment Management, a hedge fund, has revealed its acquisition of a significant portion of Southwest Airlines’ stock, allowing it to call a special meeting of shareholders. With over 61 million shares in its possession, which is equivalent to at least 10% of the airline, Elliott now possesses the authority to convene a meeting where shareholders could cast their votes on board candidates. This move heightens Elliott’s position in its proxy battle as they prepare for a meeting with Southwest officials next Monday.
Elliott, led by Paul Singer, has put forward a slate of 10 candidates, including former airline CEOs, for Southwest’s 15-member board. The hedge fund first announced its intention to shake up Southwest in June, citing the airline’s stock value decrease by over fifty percent in the last three years. Their proposal includes the replacement of CEO Robert Jordan and Chairman Gary Kelly, who was the previous CEO. Conversely, Southwest Airlines has expressed confidence in forthcoming changes aimed at enhancing its financial performance.
In July, the Dallas-based carrier disclosed plans to discontinue open-boarding in favor of assigning seats to passengers and to introduce additional charges for premium seats with increased legroom. These strategic shifts are designed to align Southwest more closely with its competitors. Southwest has assured to unveil more specifics regarding these changes during its investor day scheduled later this month.
