Southwest Airways will revamp its board and its chairman will retire subsequent yr, nevertheless 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 mentioned Tuesday that six administrators will go away the board in November and it plans to nominate 4 new ones, who may embody 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 value. The 2 sides met Monday.
Elliott blames Southwest’s administration for the airline’s inventory value 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 mentioned Tuesday that Kelly has agreed to retire after the corporate’s annual assembly subsequent yr.
Elliott argues that Southwest leaders haven’t tailored to adjustments in clients’ preferences and didn’t 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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