Southwest Airlines nominates five Elliott-appointed directors for re-election

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Southwest Airlines nominates five Elliott-appointed directors for re-election

Policy

Southwest Airlines | Official Website

By Sky Industry News

Apr 10, 2025

Southwest Airlines has announced the nomination of five board members, appointed by Elliott Investment Management, for re-election at the company's annual meeting. The names David Cush, Sarah Feinberg, David Grissen, Gregg Saretsky, and Patricia Watson, who were brought onto the board on November 1, 2024, following a cooperation agreement signed on October 23, 2024.

The airline's proxy statement, filed with the United States Securities and Exchange Commission, also includes the nominations of Bob Jordan, the President and CEO of Southwest Airlines, along with eight other directors. The board has advised shareholders to approve these nominations.

Shareholders proposed a motion for a clawback policy to hold executives accountable in cases of conduct or negligence, not just misconduct. A comparison was drawn to Wells Fargo paying significant sums following a scandal in 2016. The board responded, noting that the airline has revised its policy to reclaim erroneously awarded incentive compensation due to accounting restatements, irrespective of executive culpability.

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Elliott Investment Management holds a 9.4% stake in Southwest Airlines, part of a group of six entities owning more than 5% of the airline's shares. The Vanguard Group owns 11.4%.

Southwest Airlines faced a $140 million fine from the Department of Transportation in December 2023 for operational issues during the previous holiday season, which affected many passengers. The airline is in the process of compensating those affected and has rolled out new customer compensation policies for flight disruptions.

Rakesh Gangwal, who took over as Chair of the Board from Gary Kelly in July 2024, emphasized that the airline is under transformation partly due to rising operational costs. He highlighted recent engagements with shareholders focusing on changing the management culture to adapt to evolving industry demands.

Recent changes, such as the phasing out of free bags and introducing a basic economy product, mirror offerings from competitors like United Airlines. According to United's CEO, Scott Kirby, Southwest's new policies might pressure low-end customers to switch to other airlines, potentially affecting margins.