The hedge fund demands a change of leadership and the ouster of Southwest CEO Bob Jordan.
A Southwest 737 MAX 8 over the threshold in Las Vegas. (Photo: AirlineGeeks | William Derrickson)
Elliott Investment Management now owns 10% of Southwest’s common stock and can call a special meeting at the carrier, according to a Reuters report on Monday.
Elliott was founded in 1977 and manages approximately $70 billion in assets. The firm is scheduled to meet with the carrier on September 9 to discuss solutions for the airlines’ stock value loss over the last several years.
Southwest CEO Bob Jordan declined to resign earlier this summer after the hedge fund called for new leadership, accusing Jordan of failing to adapt to changing customer tastes. Elliott has since announced its intention to nominate 10 candidates to Southwest’s board of directors along with a list of several grievances against the airline’s current leadership on its “Stronger Southwest” website.
“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,” the website states.
On August 26, Elliott sent an open letter to Southwest shareholders detailing solutions to address what the firm calls the carrier’s “inadequate leadership.”
Reuters reports that a special meeting used to solicit shareholder votes outside of the next annual gathering is rare, and if Elliott were to call one it would mean a major escalation of its fight with the carrier.
In July, Southwest attempted to address revenue woes by adding assigned seating and redeye flights for customers.
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