Southwest hasn't pulled out of the turbulence yet, but it gets to keep its pilot
Meanwhile, former CEO Gary Kelly, who’s currently executive chairman, “will accelerate his retirement” in a deal with activist investors.
Southwest Airlines said Thursday that it reached a deal with activist investor Elliott Investment Management that would allow CEO Bob Jordan to keep his job, avoiding a brewing proxy fight.
The deal adds six new directors, five of them picked by Elliott, to the airline’s board, which will be reduced to 13 members next year. They include Pierre Breber, the former chief financial officer of Chevron, and David Cush, former CEO of Virgin America.
Elliott was reportedly pushing to oust Jordan. While he was able to keep his job, former longtime CEO and current executive chairman Gary Kelly “will accelerate his retirement” and walk out the door November 1.
Airlines went through a rough patch during the pandemic, taking on loads of debt while revenue dropped. But Southwest hasn’t enjoyed the same level of postpandemic recovery that its peers have.
Southwest Airlines share price took a beating before Elliott announced a $2 billion stake in June. The company recently said it would scrap its love-it-or-hate-it cattle-call boarding in favor of assigning seats like other airlines.
There may be a light at the end of the tunnel: the company reported better-than-expected earnings on Thursday.
