Southwest Airlines (NYSE: LUV) has announced a comprehensive board refreshment, with significant ongoing changes to the board's composition and corporate governance. The company intends to appoint four new independent directors in the near future, potentially including candidates proposed by Elliott Investment Management L.P.
Six current directors have informed the board of their plans to voluntarily step down immediately after the company’s regularly scheduled board meeting in November. The board anticipates that, following the regularly scheduled November board meeting, the number of directors serving on the board will be reduced to 13, and to 12 following the 2025 annual meeting.
The board has eliminated the executive committee structure and created a new finance committee, with a mandate focused on assisting the board with oversight of financial, operational, and business plans and strategies, major transactions, capital structure, and capital allocation priorities, among other duties.
The board has reiterated its support for Bob Jordan as CEO, stating that there is no better leader than Jordan to successfully execute Southwest Airlines’ robust strategy to evolve the airline and enhance sustainable shareholder value. The board has high expectations for Jordan and the executive leadership team and will continue to hold them accountable for delivering results.
Southwest Airlines has been engaging constructively with Elliott toward a collaborative resolution in the near term. The company has also made significant changes to its business model, including assigned seating, offering more premium options, and red-eye flights, with more changes to come at the long-planned investor day on September 26. Southwest's leadership team, under Bob Jordan’s leadership, has been pursuing meaningful, tactical changes to the route network, revenue management techniques, and marketing, merchandising, and distribution methods.
Gary Kelly, the executive chairman, has announced his intention to voluntarily retire from the board and his executive chairman position effective immediately after the 2025 annual meeting.
Southwest Airlines has been undergoing significant board refreshment since emerging from the punishing environment of the pandemic in late 2021. The company has added eight new independent directors while five have retired. The board has accelerated its efforts to refresh the board, with six current directors set to retire from the board at the upcoming regularly scheduled board meeting in November, and the board anticipates appointing four new independent directors in the near future.
The board's comprehensive changes reflect feedback from a variety of Southwest Airlines shareholders and aim to further strengthen the board’s ability to provide effective oversight and to hold management accountable as it continues to execute its strategic plan. Southwest Airlines is confident in its leadership and is committed to delivering results. Following these announcements, the company's shares moved -1.5%, and are now trading at a price of $29.27. If you want to know more, read the company's complete 8-K report here.
