Southwest backs CEO as activist Elliott seeks board overhaul

Southwest Airlines said it remained confident in its current leadership team after Elliott Investment Management proposed replacing a majority of directors on the struggling airline’s board in a looming proxy battle. Elliott “unilaterally” pushed ahead with its proposed overhaul even after agreeing to meet with the carrier next month to discuss a resolution to the activist’s push for major reforms, including board changes, Southwest said in a statement Wednesday. The airline said it remains open to talks with Elliott and will evaluate the activist’s nominees. The back and forth escalates a months-long push by the activist investor for major changes at the US airline that has recently seen its stock price and profits languish. Elliott has criticized Southwest for refusing to adopt changes embraced by rivals in the past 15 years, such as offering a bare-bones economy fare, charging customers for checked luggage and assigned seats. It has also called for ousting Southwest Chief Executive Officer Bob Jordan and Chairman Gary Kelly. In its latest move, Elliott late Tuesday nominated 10 candidates for Southwest’s 15-member board. The nominees include former Virgin America CEO David Cush; Gregg Saretsky, the former head of WestJet; and Robert Milton, the former CEO of Air Canada. The proposal came on the same day that Starbucks Corp., another iconic US brand under pressure from the activist, ousted its CEO. Although Elliott hasn’t specified changes it wants at Starbucks, many of its corporate targets have changed management after its involvement.<br/>