Elliott Investment Management late Tuesday publicly identified 10 would-be nominees to Southwest Airlines' board of directors, escalating its demand for changes to the carrier's senior management and coming closer to consummating the proxy battle it has threatened.
Southwest's response indicated that it will resist Elliott's efforts to clean house.
"Since Elliott launched its campaign against Southwest Airlines, the board has consistently sought to engage constructively and in the best interests of all shareholders," Southwest said in a statement. "Elliott has dismissed those efforts at every turn. After Elliott recently agreed to a meeting with Southwest Airlines in early September to discuss a collaborative resolution, including continuing significant board refreshment and other governance enhancements, Elliott unilaterally decided instead to publicly announce its intention to replace a majority of Southwest Airlines' board."
Elliott has been calling for the ouster of Southwest CEO Bob Jordan since June, when the investment firm revealed a $1.9 billion stake in the carrier, representing about an 11% economic interest, and threatened the carrier with a proxy battle. Jordan has vowed to stay on.
Elliott in a statement said it plans to "move forward expeditiously to formally nominate" the would-be board candidates, which include former Virgin America CEO and former American Airlines SVP of global sales David Cush, former Marriott International group president for the Americas Dave Grissen, former Air Canada CEO Robert Milton and former WestJet president and CEO Gregg Saretsky.
The other six nominees are:
• Michael Cawley, former deputy CEO, COO and CFO of Ryanair
• Sarah Feinberg, former chief of staff to U.S. Department of Transportation Secretary Anthony Foxx
• Josh Gotbaum, the former Chapter 11 trustee of Hawaiian Airlines
• Nancy Killefer, former Obama administration chief performance officer and McKinsey & Co. director
• Eash Sundaram, former JetBlue chief digital and technology officer
• Patty Watson, NCR Atleos executive vice president and chief information and technology officer
Elliott said its nominees were selected after a "months-long global search for the best individuals with the optimal mix of backgrounds and expertise to address Southwest's current challenges and deliver on the company's potential" and said Southwest's current 15-member board "has delivered poor returns for shareholders and has not held management accountable for Southwest's unacceptable performance."
Southwest's board said it "remains confident that the airline has the right leadership team in place to evolve the business and to lead Southwest Airlines forward."
Regarding the board's makeup, Southwest said it has "taken deliberate actions to bolster the board's existing expertise ... appointing a total of eight new independent and highly qualified directors over the last three years, including the recent addition of experienced airline executive and entrepreneur Rakesh Gangwal."
Source: Business Travel News