Tuesday, July 9, 2024 Elliott Investment Management L.P. has issued a letter to the Board of Southwest Airlines Co.
(NYSE: LUV), calling for a leadership change due to widespread dissatisfaction among shareholders with the Company’s performance. Elliott contends that new leadership is essential to restoring Southwest to its former leading position in the industry. In the letter, Elliott criticizes recent actions by Southwest’s Board and management, which have only strengthened the case for a leadership overhaul.
These actions include the adoption of a “poison pill” to prevent Elliott from increasing its stake above 12.5% and the appointment of a new director perceived as supportive of the current leadership. Elliott argues that these moves indicate a disconnect between the Board and shareholder sentiment, as well as the reality of the Company’s situation.
Elliott emphasizes that the Board must recognize that Southwest’s current leadership has lost shareholder trust. According to Elliott, shareholders do not believe the existing Board and management can create and execute a bold plan to turn around the Company’s fortunes. To achieve a higher-performing future for Southwest, Elliott proposes: Elliott expressed willingness to collaborate with the Board but warned that if there is no alignment, it intends to expedite measures to give shareholders a direct say in the necessary leadership changes.
The letter, available for download at StrongerSouthwest.com, underscore.