A fresh perspective has been promised at Southwest airlines as six directors to are to retire in November with Executive Chairman Gary Kelly (pictured) to retire immediately after the 2025 Annual Meeting.
These changes have been forced by the so-called ‘activist investor’ firm Elliott Investment Management L.P which has been sharply critical of Southwest’s management in recent months. Representatives from Elliott have been invited Elliott to participate in refreshment efforts and other corporate governance changes.
READ: Southwest CEO under fire as investors criticise leadership
However, the airline has re-affirmed its commitment to CEO Bob Jordan, who Elliott has directly criticised for what it perceives as a dated management style. It is not yet clear if Elliott will accept these changes, or what the reaction of what the other shareholders will be.
The Board anticipates appointing four new independent Directors in the near future. In addition to considering Elliott’s Director candidates, the Nominating and Corporate Governance Committee has engaged a leading independent search firm to identify and review strong candidates who can bring complementary skills and experience to lead the airline forward.
The airline has added or appointed eight highly qualified Directors over the past three years, including the recent appointment of Rakesh Gangwal, co-founder of India’s largest airline, InterGlobe Aviation (IndiGo). With these changes, the Company expects the number of Directors serving on the Board to be reduced to 13 following the regularly scheduled November Board meeting and to 12 following the 2025 Annual Meeting. Inclusive of all of these changes, 75% of the airline’s Directors will have three years or less tenure on the Board as of the 2025 Annual Meeting and the average Board tenure will be approximately 2.5 years, reduced from 7.3 today.
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