Stronger Southwest
New Leadership Is Long Overdue at Southwest
Elliott Investment Management L.P., which manages funds that together have an approximately 11% economic interest in Southwest Airlines, intends to nominate ten independent, highly qualified candidates to Southwest’s Board. These candidates include four former airline CEOs and Deputy CEOs and six candidates with complementary expertise in technology, hospitality, consumer-focused businesses, labor relations and regulatory oversight, including experience leading organizational change in these areas.
When nominated, these Candidates would give shareholders a choice between the Company’s existing Board, which has delivered poor returns for shareholders and has not held management accountable for Southwest’s unacceptable performance, or a new Board that brings relevant expertise, fresh thinking and accountability.
Highly Qualified Nominees to Deliver a Brighter Future for Southwest
Sarah FeinbergFormer Transportation Regulator and Administrator of the Federal Railroad Administration
Hon. Joshua “Josh” GotbaumSeasoned Advisor to Companies and Labor Groups and Former Hawaiian Airlines Trustee
In all our decades of investing, we cannot recall a proposed board slate so eminently qualified for the task at hand
Artisan Partners, Top Ten Active Shareholder
Elliott’s Plan to Improve Southwest
We are convinced that Southwest represents the most compelling airline turnaround opportunity in the last two decades.
We are calling for three steps to put Southwest on the path to restoring its industry-leading position:
- Enhancing the Board
- Upgrading Leadership
- Conducting a Comprehensive Business Review
I would rate them as the worst-performing management team in airlines. This was a Company that has destroyed more value based on their own inaction than anyone else in the industry. They need to go.
Top Ten Active Shareholder
Southwest’s Unacceptable Performance Has Continued
The urgency of change is underscored by the substantial continued deterioration in Southwest’s performance since Elliott initially published its materials on June 10 and the Board’s actions in response to further entrench itself and resist change.
- Reduced second quarter revenue guidance – representing the eighth guidance cut in 18 months
- Adopted a shareholder-unfriendly “poison pill” to prevent Elliott from increasing its ownership above 12.5%
- Added a hand-picked new director in a clear effort to entrench the current Board and management
- Initiated disappointing third-quarter guidance continuing the trend of deteriorating performance
The CEO is a headwind to a turnaround. Firing him is the tailwind.
Top Ten Active Shareholder
Southwest Deserves Better
Investors do not want to see a new plan from the same leadership team whose record at the Company has been one of failure. We look forward to offering our fellow shareholders an opportunity to elect a Board of industry leaders that can return Southwest to best-in-class performance.
I have zero confidence this team can get this right and certainly not in the timeframe that is needed. I rarely call for wholesale change at a company, but that is what is needed here.
Top Ten Active Shareholder
About Elliott
Founded in 1977, Elliott Investment Management L.P. (together with its affiliates, “Elliott”) is one of the oldest investment managers of its kind under continuous management. Elliott manages multi-strategy investment funds with approximately $69.7 billion of assets as of June 30, 2024. Our investors include pension funds, private endowments, charitable foundations, family offices and employees of the firm, and our offices are located in Florida, Connecticut, New York, California and London.
