Southwest Airlines Company LOVE Shares are trading lower on Wednesday.
Elliott Investment Management, which holds an economic interest of approximately 11 percent in Southwest Airlines, announced yesterday its plan to nominate ten independent and highly qualified candidates to the airline’s board of directors.
Elliott Investment had previously advocated three key measures to restore Southwest Airlines’ position: reconstituting the board of directors, appointing a new management team and conducting a comprehensive business review.
According to Benzinga Pro, LUV stock has lost over 24% in the past year. Investors can invest in the stock through the US Global Jets ETF. NOZZLES and Themes Airlines ETF AIRL.
Related reading: “Poison pill” activated: Southwest Airlines counters Elliott Investment’s move with defensive strategy
Elliott said Southwest’s performance has deteriorated since the first report on June 10, and the board has responded by becoming even more entrenched and resisting change.
Elliott noted that these candidates offer shareholders a choice between the current board, which has delivered poor returns and failed to hold management accountable for Southwest’s performance, and a new board with appropriate expertise, fresh perspectives and a commitment to accountability.
Elliott’s nominees are: Michael Cawley, David Cush, Sarah Feinberg, Josh Gotbaum, Dave Grissen, Nancy Killefer, Robert Milton, Gregg Saretsky, Eash Sundaram and Patty Watson.
Elliott is confident that, if elected, these candidates will help restore the company to its status as a leading, most profitable airline.
Southwest responded: “Southwest Airlines’ board and management remain open to discussions with Elliott to discuss ideas to increase shareholder value. The board will evaluate the candidates proposed by Elliott as part of its ongoing board renewal process.”
Southwest Airlines said Elliott recently agreed to meet with the company in early September to discuss a mutual solution, but instead unilaterally decided to publicly announce his intention to replace much of the board.
Southwest Airlines plans to provide further details on a comprehensive plan to transform its business, improve operating efficiency and ensure disciplined capital allocation at its investor day in late September.
Southwest Airlines said its board remains confident the airline has the right leadership team in place to drive the business forward.
Price promotion: At last check on Wednesday, LUV shares were trading 0.78% lower at $25.22.
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