A Southwest Airlines Boeing 737 jet departs from San Diego International Airport to St. Louis on August 24, 2024 in San Diego, California.
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Southwest Airlines and investor activist Elliott Investment Management announced there they have struck a settlement deal that staves off the proxy war in exchange for the addition of six directors to the board of the airline and the accelerated retirement of executive chairman Gary Kelly. In particular, the deal allowed CEO Bob Jordan to keep the top job.
Five of Elliott’s board nominees along with former Chevron CFO Pierre Breber will join the board, the company announced. Southwest’s board will elect a new chairman to replace Kelly, who will now step down in November. Breber is on board at Avianca, Colombia’s flag carrier.
“We are pleased to have come to an agreement with Southwest on the addition of six new directors who will improve and revitalize its board,” Elliott John Pike and Bobby Xu said in a statement.
Elliott and Southwest as recently as last week have been girding up for a proxy fight. The activists are seeking to install 10 new directors on the operator’s board and are calling for a special meeting in December to elect them. Elliott’s campaign hinged heavily on removing Kelly and Jordan from leadership positions.
In September, Southwest said Kelly would resign next spring, but the airline’s board backed Jordan.
“I believe Southwest’s best days will be under the vision and leadership of Bob Jordan and the oversight of this reconstituted Board,” Kelly said in a Thursday release.
— CNBC’s Leslie Josephs contributed to this report.
