Activist investor Elliott takes Southwest fight to shareholders, nominates eight directors

Elliott Investment Management is taking its fight with Southwest Airlines to investors by calling for a special shareholder meeting where they can vote on new director candidates who would ultimately steer company strategy.In calling for the meeting, Elliott is taking a highly unusual step but one it has telegraphed for weeks after concluding recent changes made by the carrier fall short of ensuring real improvements.Southwest, which has a market capitalization of $18.45 billion, did not immediately respond to a Reuters request for comment.Elliott, the firm founded by Paul Singer which oversees about $70 billion in assets and owns 10% of Southwest’s common stock, has pushed for months to replace some members of the board, oust chief executive Bob Jordan, and review its strategy to improve financial performance and boost the share price.On Monday, the hedge fund said it was officially calling for the special meeting to be held in December and submitted proposals to replace eight directors and take control of the board.The company’s last annual meeting was held in May 2024.“Absent a thorough reconstitution of its Board, the story of Southwest will remain one of empty promises and unfulfilled potential,” Elliott partner John Pike and portfolio manager Bobby Xu said in a statement.The board currently has 15 members but the size will shrink to 13 next month and further to 12 at the annual meeting next year.Southwest Airlines, which has been struggling to remain profitable since the COVID-19 pandemic, has taken steps to turn the business around, including adding seats with more leg room, and dropping its marquee open seating system.Last month, the airline unveiled several initiatives to shore up sagging profits, including partnerships, vacation packages for customers and aircraft sale-leasebacks.It also added a new director earlier this year and said six directors would go in November and that executive chairperson Gary Kelly would leave next year in May.South...