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Update 21:05: Adds Elliott confirmation.
Activist Elliott Investment Management is preparing for a proxy fight at Southwest Airlines (NYSE:LUV).
The well-known activist fund plans to nominate 10 director candidates for the airline’s 15-member board, according to a statement from Elliott on Tuesday. Elliott is expected to call a special meeting to allow owners to vote on the nominees.
The nominees include four former airline CEOs and deputy CEOs, and six candidates with expertise in technology, hospitality, customer-facing businesses, industrial relations and regulatory oversight. The nominees include Michael Cawley, former deputy CEO, COO and CFO of Ryanair, David Cush, former CEO of Virgin America, Robert Milton, former CEO of Air Canada, and Gregg Saretsky, former CEO of WestJet.
“If these candidates were nominated, shareholders would have a choice between the company’s existing board, which has delivered poor returns to shareholders and failed to hold management accountable for Southwest’s unacceptable performance, or a new board that brings relevant expertise, fresh thinking and a sense of responsibility,” Elliott said in the statement.
The news comes after Elliott confirmed in June that he owns a $2 billion stake in Southwest (LUV). The activist pushed for a business review of the airline and believes the airline’s stock price can reach $49 per share. Elliott called for new leadership, including the company’s CEO Bob Jordan and chairman Gary Kelly.
Elliott still wants Jordan and Kelly replaced, but is now focused on restructuring the board, according to Tuesday’s WSJ report, which first reported on the proxy fight.
Late last month, Elliott Management said Southwest Airlines’ (LUV) “revenue-boosting initiatives” aimed at eliminating empty seats were “too little, too late,” coming more than a decade too late and after a 50% drop in its stock price.
