Executive chairman Gary Kelly will step down next year, while six board members will voluntarily step down in November
Southwest Airlines (LUV) executive chairman and former chief executive officer Gary Kelly will be stepping down from the company next year, along with six other board members. This comes as activist investor Elliott Investment Management continues to mount pressure for change at the air carrier.
As previously reported by Reuters, Elliott Investment Management has a 10% state in the company – as the investor aims to install a new leadership team and onboard several new board members to conduct a new strategic business review, which was announced in June.
In June, the hedge fund also bought a nearly $2 billion stake in the company, making it now one of the airline’s largest shareholders. The investor said Southwest has had “stunning underperformance” under CEO Bob Jordan’s leadership.
In a letter to shareholders, Kelly stated that “now is the time for change,” and that it is the time to “shake things up, not just stir them a bit.” His retirement goes into effect following the company’s annual meeting, which is expected to be held next May. The six board members will voluntarily step down following the board meeting in November.
Kelly, who has been with Southwest for nearly four decades, said that Southwest’s board and leadership “unanimously support” CEO Jordan and the rest of the executive board.
Since the COVID-19 pandemic, Southwest has struggled to remain cost-effective and has made various changes, including adding seats with more wiggle room.
Melvin Blackman contributed to this reporting
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