
Southwest Airlines: Board restructuring after conflict with Elliott Investment Management
Southwest Airlines, one of the largest low-cost airlines in the United States, is facing a far-reaching redesign of its board of directors. This development is the result of a months-long conflict with activist investor Elliott Investment Management, which has now been settled by an agreement. Elliott, known for his aggressive investment strategies, had strongly criticized Southwest's corporate governance and demanded decisive changes to the board to improve the airline's operational and financial performance. This agreement marks a turning point in Southwest's leadership and sets the course for a new strategic direction. Background to the conflict: Elliott Investment Management's demands In the summer of 2024, Elliott Investment Management began to build a significant stake in Southwest Airlines and shortly thereafter publicly expressed harsh criticism of the company's leadership. The main targets of the criticism were CEO Bob Jordan and several of the company's directors, who Elliott said were blamed for stagnant performance and poor corporate governance. Elliott, led by John Pike and portfolio manager Bobby Xu, demanded the removal of eight of the then directors and the appointment of its own list of eight new candidates to the board. A particular focus was the demand for a special meeting of shareholders to vote on these changes. Elliott argued that only through comprehensive changes in the board and at the top of the company would Southwest be able to create long-term sustainable shareholder value and improve operating performance. Southwest, on the other hand, described Elliott's demands as "unnecessary and inappropriate". In an official statement, the company stated that Elliott "persistently demands control of the board".