Southwest digs in for boardroom battle with Elliott
Southwest Airlines is girding itself for a fight with Elliott Investment Management, rallying support from investors and employees to face down an activist investor looking for wholesale changes to company leadership.<br/>In recent weeks, CEO Bob Jordan has been meeting and gathering feedback from investors to stave off Elliott's advances - casting the investment firm's approach as predatory. For its part, the hedge fund has cited the underperformance of Southwest's stock and the Dallas-based airline's "rigid commitment to a decades-old approach" as reasons to revamp the board and executive suite. "Don't be fooled - this is a battle for the heart of our company and our future - your future," Jordan wrote on Wednesday in a staff memo, seen by Reuters. Southwest has built a reputation through its 53-year-history as a low-cost darling of many American travelers, inspiring case studies at business schools. Similarly, Elliott is known as a formidable negotiator, capable of extracting concessions and pushing out CEOs at companies such as Starbucks after amassing a heavy stake. Elliott has made no secret of its goals. It wants to oust both Jordan and Southwest's board chair Gary Kelly, blaming them for the airline's financial results, to replace two-thirds of the board's 15 directors and to change the way the company has been running its business in order to make it compete better in the modern airline industry. The hedge fund does not have a track record in the airline industry. Some analysts worry that extensive changes could damage the airline's brand that has helped Southwest stand out from rivals and cultivate a loyal fan base.<br/>However, Southwest has been struggling to find its footing after the pandemic. It has been hit hard by its over-reliance on Boeing for its fleet due to regulatory and safety struggles that have reduced the jetmaker's ability to deliver new planes.<br/>
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Southwest digs in for boardroom battle with Elliott
Southwest Airlines is girding itself for a fight with Elliott Investment Management, rallying support from investors and employees to face down an activist investor looking for wholesale changes to company leadership.<br/>In recent weeks, CEO Bob Jordan has been meeting and gathering feedback from investors to stave off Elliott's advances - casting the investment firm's approach as predatory. For its part, the hedge fund has cited the underperformance of Southwest's stock and the Dallas-based airline's "rigid commitment to a decades-old approach" as reasons to revamp the board and executive suite. "Don't be fooled - this is a battle for the heart of our company and our future - your future," Jordan wrote on Wednesday in a staff memo, seen by Reuters. Southwest has built a reputation through its 53-year-history as a low-cost darling of many American travelers, inspiring case studies at business schools. Similarly, Elliott is known as a formidable negotiator, capable of extracting concessions and pushing out CEOs at companies such as Starbucks after amassing a heavy stake. Elliott has made no secret of its goals. It wants to oust both Jordan and Southwest's board chair Gary Kelly, blaming them for the airline's financial results, to replace two-thirds of the board's 15 directors and to change the way the company has been running its business in order to make it compete better in the modern airline industry. The hedge fund does not have a track record in the airline industry. Some analysts worry that extensive changes could damage the airline's brand that has helped Southwest stand out from rivals and cultivate a loyal fan base.<br/>However, Southwest has been struggling to find its footing after the pandemic. It has been hit hard by its over-reliance on Boeing for its fleet due to regulatory and safety struggles that have reduced the jetmaker's ability to deliver new planes.<br/>
