Southwest Airlines will revamp its board and its chairman will retire next year, but it intends to keep CEO Robert Jordan after a meeting with hedge fund Elliott Investment Management, which has sought a leadership shakeup at the airline including Jordan’s ouster.
Southwest said Tuesday that six directors will leave the board in November and it plans to appoint four new ones, who could include candidates put forward by Elliott.
Elliott, the fund led by billionaire investor Paul Singer, has built a 10% stake in recent weeks and advocated changes it says will improve Southwest’s financial performance and stock price. The two sides met Monday.
Elliott blames Southwest’s management for the airline’s stock price dropping by more than half over three years. The hedge fund has wanted to replace Jordan , who has been CEO since early 2022, and Chairman Gary Kelly, the airline’s previous chief executive. Southwest said Tuesday that Kelly has agreed to retire after the company’s annual meeting next year.
Elliott argues that Southwest leaders haven’t adapted to changes in customers’ preferences and failed to modernize Southwest’s technology, contributing to massive flight cancellations in December 2022. That breakdown cost the airline more than $1 billion.
Shares of Southwest Airlines Co. rose slightly before the opening bell Tuesday.