Southwest Chairman Gary Kelly to retire, under pressure from activist Elliott
Adds analyst comments, updates share price, background details
By Rajesh Kumar Singh and Shivansh Tiwary
Sept 10 (Reuters) -Southwest Airlines LUV.N on Tuesday announced changes to its board including the retirement of Chairman Gary Kelly, but reiterated its support for CEO Bob Jordan despitecalls for a shakeup from activist investor Elliott Investment Management.
Kelly has worked at the U.S. carrier for nearly four decades and has been chairman since founder Herb Kelleher retired in 2008. He served as the company's CEO for 18 years before handing the reins to Jordan in 2022.
Elliott, among the world's most powerful activist investors, haslaunched a boardroom battle, demanding the ouster of both Kelly and Jordan. It wants Southwest to changemanagement's "rigid commitment to a decades-old approach", and has laid out plans to replace two-thirds of the board's 15 directors.
Elliott now holds a largeenough stake in the company to call a special shareholder meeting.
In a letter to shareholders after a meeting with Elliott in New York on Monday, Kelly said his role as chairman was always meant to be transitional and would end next year in the spring after Southwest's annual meeting.
Both Southwest and Kelly expressed confidence in Jordan's leadership.
"Bob has a proven track record over decades," Kelly said. "Most importantly, he has what it takes to lead Southwest through a significant transformation."
As part of the overhaul,six directors will voluntarily step down in November. Southwest plans to appoint four new independent directors in the near term, which would potentially include up to three candidates proposed by Elliott.
The airline's board has set up a new finance committee to oversee financial, operational, and business plans and strategies and capital structure, among other things.
Southwest's shares, which have fallen about 38% in the past three years, were down about 3.5% at $28.70 in mid-day trade.
Analysts at Citi said the board changes were "adjustments to Southwest's strategic positioning," rather than "an attempt to reinvent the wheel."
Elliott called the changes "unprecedented" and said it was pleased that Southwest's board was "beginning to recognize the degree of change that will be required" at the company.
"The need for thoughtful, deliberate change at Southwest remains urgent," it said in a statement, adding its nominees are "the right people to steady the board and chart a new course for the airline."
Southwest has been struggling to find its footing after the pandemic. It has been hit hard by its over-reliance on Boeing BA.N, for its fleet due to regulatory and safety struggles that have reduced the jetmaker's ability to deliver new planes.
It has also been facing pricing pressure as an industry-wide overcapacity in the domestic market has dampened airfares.
To turn around its fortunes, it plans to offer assigned and extra-legroom seats to attract premium travelers, and start overnight flights.
It is due to share more details on Sept. 26.
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Reporting by Shivansh Tiwary in Bengaluru and Rajesh Kumar Singh in Chicago; Editing by Shilpi Majumdar, Jan Harvey, Nick Zieminski and David Gregorio
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إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.
جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.
أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.
