Southwest Airlines announced the next phase of its board’s transformation on Tuesday as six directors are slated to retire in November along with Executive Chairman Gary Kelly.
According to a news release from the airline, the board presented its plans at a meeting on Wednesday and invited Elliott Investment Management L.P. to participate in reorganizing its corporate governance.
Kelly announced his intention to voluntarily retire from his position immediately after the company’s regular scheduled board meeting in November along with the following six directors:
- David Biegler (Compensation Committee Chairman)
- Veronica Biggins (Nominating and Corporate Governance Committee Chair)
- Senator Roy Blunt
- Dr. William Cunningham (Lead Director)
- Dr. Thomas Gilligan (Audit Committee Chairman)
- Jill Soltau
Kelly’s letter to shareholders regarding his resignation can be read in full here.
The board expects to appoint four new independent directors in the near future. In addition to considering Elliott’s director candidates, the Nominating and Corporate Governance Committee is also leading an independent search to identify candidates.
Elliott currently owns 10% of Southwest’s common stock and has been an outspoken critic of the airline’s leadership amidst less-than-spectacular stock performance over the past few years. The activist investing firm announced intentions to nominate 10 candidates to Southwest’s board of directors on its “Stronger Southwest” website.
The airline has added or appointed eight directors over the past three years, including the recent appointment of Rakesh Gangwal, co-founder of India’s largest airline, InterGlobe Aviation. Per the release, Southwest expects the number of directors to be reduced to 13 following the regularly scheduled November board meeting and to 12 following the 2025 Annual Meeting.
“Inclusive of all of these changes, 75% of the airline’s Directors will have three years or less tenure on the Board as of the 2025 Annual Meeting and the average Board tenure will be approximately 2.5 years, reduced from 7.3 today,” the release stated.
Sticking with Bob Jordan
Despite previous calls by Elliott for his resignation, the release states that Southwest’s board is confident in CEO Bob Jordan’s leadership and ability to enhance shareholder value.
“Jordan is implementing intentional changes to transform the business, meet evolving Customer preferences, enhance the Customer Experience, further modernize the airline, and drive Shareholder returns,” the release states. “During his tenure as CEO, Jordan has been the visionary and key driver behind the review and development of the commercial initiatives outlined at the airline’s second quarter financials and made substantial improvements to the airline’s operational performance, all with a commitment to driving improved financial performance. Introducing leadership change in the middle of Southwest Airlines’ largest transformation to-date would present significant risk to the Company and its Shareholders.”
The release reiterates that the board has high expectations for Jordan and the executive leadership team and will hold them accountable for delivering results.
