Southwest Airways will revamp its board and its chairman will retire subsequent 12 months, however it intends to maintain CEO Robert Jordan after a gathering with hedge fund Elliott Funding Administration, which has sought a management shakeup on the airline together with Jordan’s ouster.
Southwest stated Tuesday that six administrators will depart the board in November and it plans to nominate 4 new ones, who might embrace candidates put ahead by Elliott.
Elliott, the fund led by billionaire investor Paul Singer, has constructed a ten% stake in latest weeks and advocated adjustments it says will enhance Southwest’s monetary efficiency and inventory worth. The 2 sides met Monday.
Elliott blames Southwest’s administration for the airline’s inventory worth dropping by greater than half over three years. The hedge fund has wished to substitute Jordan , who has been CEO since early 2022, and Chairman Gary Kelly, the airline’s earlier chief govt. Southwest stated Tuesday that Kelly has agreed to retire after the corporate’s annual assembly subsequent 12 months.
Elliott argues that Southwest leaders haven’t tailored to adjustments in clients’ preferences and did not modernize Southwest’s expertise, contributing to huge flight cancellations in December 2022. That breakdown price the airline greater than $1 billion.
Shares of Southwest Airways Co. rose barely earlier than the opening bell Tuesday.
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