Southwest Airlines braces for boardroom proxy battle

Elliott Investment Management is gearing up for a proxy battle at Southwest Airlines (LUV), as it announced plans to nominate 10 candidates for seats on the airline's 15-person board. Southwest responded to the news in a statement saying, "Since Elliott launched its campaign against Southwest Airlines, the Board has consistently sought to engage constructively and in the best interests of all shareholders. Elliott has dismissed those efforts at every turn."

Morning Brief Anchors Seana Smith and Brad Smith report more on the story and break down some of Elliott's nominees for the Southwest board.

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This post was written by Melanie

Video Transcript

Elliot investment management is gearing up for a proxy battle at Southwest Airlines.

Elliott said it plans to nominate 10 candidates for seats on the airline's 15 person board.

You can do the math.

It's about 66% of the board seats that they're vying for Southwest.

Responding to the activist and saying this since Elliott launched its campaign against Southwest Airlines, the board has consistently sought to engage constructively and in the best interests of all shareholders.

Elliott has dismissed those efforts at every turn.

That's the statement from Southwest.

And uh of course, as we're continuing to think about what this means for shares of LUV which over the course of this year, it's been uh you know, a really challenging year for Southwest Airlines, especially considering the broader airline space here, but down about 10% year to date, no doubt Elliott and this activist position looking to, you know, figure out how they can have a say in the turnaround plan and strategy, see some return on their shareholder value.

Yes, Southwest is pretty fed up with the underperformance that we've seen here of Southwest.

They've also criticized the fact that what they say Southwest has refused to adopt changes that has spread across the industry and that has contributed to the underperformance that we have seen in shares.

Brad, you just mentioned the fact that Elliott has nominated 10 candidates for Southwest Sports and I was taking a look at who they are.

Nominating.

A number of them are actually former CEO S or executives within the airline industry.

They're looking to nominate the former CEO of Virgin America David Kush.

They also wanna nominate the former head of Westjet.

That's Greg Srey and Robert Milton.

He's a former CEO of uh of Air Canada.

So again, those who have some experience within the industry, they want to see appointed to the board of Southwest, they also said in a separate filing that is 8.2% stake in the airline has to amass about a 10% holding before it can seek that special meeting here for investors to vote on those nominees that expecting that to occur before the airline's annual meeting next spring.

So again, Southwest has been a tremendous amount of pressure, some underperformance there over the last several months.

So again, Elliott here pushing for some changes and we'll say obviously to no surprise, Southwest pushing back on that.