Southwest Airlines CEO Bob Jordan said when interviewed by CNBC outside the New York Stock Exchange on December 9, 2021.
Brendan McDermid | Reuters
A above Southwest Airlines shareholders Wednesday signaled their support for activist Elliott Management’s campaign to oust CEO Bob Jordan and Executive Chairman Gary Kelly, as the carrier struggles with poor performance compared to some of its rivals.
Artisan Partner‘ Daniel O’Keefe and Michael McKinnon said in a public letter to Southwest’s board that the company noted Elliott’s Monday campaign launch “with great interest.” The two men said Artisan in recent months told Kelly privately “many of the same points” that Elliott made publicly.
“We are writing today to urge the Board to reconstitute itself and upgrade the Company’s leadership,” wrote O’Keefe and McKinnon.
Southwest said in a statement that the company is receiving feedback from all shareholders. “The Board is confident in the ability of our CEO and Leadership Team to evolve the business and drive long-term value for all stakeholders,” the statement read.
Artisan, a $158.6 billion asset manager, has a 1.8% stake in Southwest, making it the 10th largest shareholder. It has held a stake in the airline since 2001, according to FactSet data, accumulating its current holdings from 2020.
O’Keefe and McKinnon oversee Artisan’s Global Value Team, which manages $28 billion in assets.
Elliott has an economic interest in Southwest worth $1.9 billion and is seeking a full business review in addition to ousting Jordan and Kelly.
Earlier on Wednesday, Jordan said he had no plans to step down during Elliott’s campaign, adding that Elliott could offer ideas but would not “direct the company,” Reuters reported.
However, the move will increase the pressure on the company. Elliott said in his presentation that he had researched shareholders, as well as employees and customers, before opening a stock.
Other Southwest shareholders include Putnam Investment Management and T. Rowe Price, as well as BlackRock and Vanguard. Together, excluding Elliott’s economic interests, institutional shareholders control approximately 60% of Southwest’s outstanding shares.
— CNBC’s Leslie Josephs contributed to this report.
