Southwest Airlines Braces for Proxy Fight With Activist Investor Elliott, and More

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Elliott Management Launches Proxy Battle for Control of Southwest Airlines Board

Elliott Investment Management is launching a proxy fight with Southwest Airlines, planning to nominate 10 candidates for the airline's 15-member board.

This move represents a significant escalation in Elliott's efforts to drive changes at the company.

Key Points

• Elliott currently holds an 11% economic interest in Southwest, with 7% being common stock.

• To call a special shareholders meeting, Elliott needs 10% of common shares, a threshold it's expected to reach soon.

• Elliott wants to oust CEO Bob Jordan and Chairman Gary Kelly, and conduct a comprehensive business review.

• The 10 director candidates include former airline executives, officials with regulatory and labor relations experience, and leaders from consumer-focused businesses.

• Southwest recently announced major changes to its business model, including ending open seating and adding premium seating options.

What It Means

This proxy fight represents a major challenge to Southwest's current leadership and strategic direction. If successful, Elliott's nominees could dramatically reshape Southwest's board and push for significant changes to the company's business model and management.

The conflict highlights the pressures facing Southwest and other airlines to adapt their strategies in a competitive market with changing consumer preferences.

Southwest's management hints to put forward a vigorous defense and seek to persuade shareholders that its current plans are the right path forward.

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