Vacationers examine in at a Southwest counter at Hartsfield-Jackson Atlanta Worldwide Airport (ATL) in Atlanta, Georgia, US, on Tuesday, July 23, 2024.
Elijah Nouvelage | Bloomberg | Getty Photos
Elliott Funding Administration has requested a particular assembly at Southwest Airways, formalizing the launch of a long-signaled proxy battle for management of the provider’s board.
The activist is searching for a gathering date of Dec. 10, it stated Monday. Elliott has additionally trimmed the dimensions of its board slate from 10 director candidates to eight, after Southwest shrunk its board dimension from 15 to 12.
CNBC reported final month that Elliott was getting ready to name a particular assembly.
Southwest’s marketing campaign will likely be Elliott’s first U.S. proxy battle because it took on Arconic in 2017.
Elliott has an 11% stake within the airline and is searching for the ouster of CEO Bob Jordan. It had additionally been seeking to take away govt chairman Gary Kelly, however the former CEO introduced he would step off the corporate’s board within the September shuffle that shrank Southwest’s board.
David Hess, who joined Southwest’s board in 2021, was additionally on the board of Arconic within the midst of its proxy battle with Elliott. Hess, whom Elliott is focusing on for removing, in the end grew to become CEO of the Alcoa spinoff shortly earlier than the corporate settled with Elliott.
Elliott has by no means earlier than known as for a particular assembly, which at Southwest carries the next threshold of approval in contrast with voting at a usually scheduled shareholder assembly. Elliott can have rather less than two months to solicit votes from shareholders giant and small.
One high Southwest shareholder, Artisan Companions, whereas not an activist investor, has already publicly expressed its help for Elliott’s marketing campaign.
Southwest representatives didn’t instantly return a request for remark. The airline’s shares rose roughly 1% in premarket buying and selling on the information.
At an investor day late final month, Southwest reiterated its plans to drum up income, together with including seats with further legroom and ending its assigned seating mannequin. The corporate has stood by Jordan.
Elliott dismissed Southwest’s technique, and Jordan fired again: “For Elliott to name that plan rushed and haphazard for my part, is inane.”
Elliott is among the most prolific activist buyers on this planet, mounting challenges at corporations together with Salesforce and Starbucks.
“The nominees we now have put ahead as we speak are uniquely certified to carry the corporate’s govt management accountable and be certain that the corporate delivers improved outcomes,” Elliott associate John Pike and portfolio supervisor Bobby Xu stated in a press release.
— CNBC’s Leslie Josephs contributed to this report.
