Elliott Investment group calls for special meeting at Southwest Airlines
DALLAS - An activist investor group that wants to see major changes at the top of Southwest Airlines has called a special meeting for December.
It wants to replace at least eight members of the board of directors with its own candidates.
Elliott Investment Management is following through on its word to make big changes at the top for Southwest Airlines.
Monday’s announcement of a special meeting for shareholders in December comes a few weeks after SWA executives announced changes to the board and the airline.
Elliott Investment Management announced on Monday that it’s calling a special meeting for shareholders on Dec. 10.
In June, the hedge fund acquired an 11% stake in the company, meaning it gained enough shares to call the meeting.
Mike Davis is an economist at SMU. He’s been following the back-and-forth battle between Elliott and Southwest for months.
"It's really not surprising," he said. "I mean, once you know, the snowball has started down the hill. And we'll find out how far it goes and whether it runs into a rock."
This includes Southwest Airlines executives’ announcement in September about changes coming to the board.
The revamp involves six members stepping down and former CEO and executive chairman Gary Kelly planning to voluntarily retire in 2025.
The airline also unveiled a new plane design set to take flight in 2026 and announced changes to policies, including no more open seating and a reduction in flights.
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"Obviously, it's not the right kind of changes to make Elliott happy," Davis said. "But whether it's enough to change the direction of the airline, that's going to be hashed out between now and that meeting in December. And it probably won't be completely hashed out after that meeting."
Davis says airline executives should have anticipated Elliott to call a special meeting since the hedge fund has been pushing for changes at the top for months.
In the announcement Monday, Elliott offered proposals for eight new board directors to be elected at the December meeting.
Some of the nominees have been former airline executives at Virgin America, Air Canada and WestJet. Another candidate is a former senior official of the Department of Transportation.
Davis says passengers and employees should be paying attention to what’s going on as it will affect them in the long term.
"Southwest has every incentive to try and keep their customers happy, and they have every incentive to try and keep their employees happy," he said. "It's really just a question of whether this policy or that policy is going to be the best one."
FOX 4 reached out to Southwest for a statement on the announcement, but we still haven’t heard back.