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Elliott Calls for Special Meeting of Shareholders in Order to Bring Urgently Needed Change to Southwest

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Elliott Investment Management L.P., managing funds with an 11% economic interest in Southwest Airlines Co. (NYSE: LUV), has called for a Special Meeting of Shareholders on December 10, 2024. Elliott aims to elect eight independent directors and remove eight current directors from Southwest's Board. The move comes after unsuccessful attempts to persuade Southwest to implement necessary governance changes.

Elliott's proposed slate includes experienced executives from the aviation and hospitality industries. The investment firm argues that Southwest needs improved oversight and accountability to deliver on its promises and potential. Elliott urges shareholders to ensure they can vote their shares and calls on Southwest to confirm the meeting date promptly.

Elliott Investment Management L.P., che gestisce fondi con un interesse economico dell'11% in Southwest Airlines Co. (NYSE: LUV), ha convocato un'Assemblea Straordinaria degli Azionisti per il 10 dicembre 2024. Elliott intende eleggere otto membri del consiglio di amministrazione indipendenti e rimuovere otto attuali direttori dal consiglio di Southwest. Questa mossa arriva dopo tentativi infruttuosi di persuadere Southwest a implementare le necessarie modifiche nella governance.

Il piano proposto da Elliott include dirigenti esperti nei settori dell'aviazione e dell'ospitalità. La società di investimento sostiene che Southwest necessiti di un miglior controllo e responsabilità per mantenere le sue promesse e il suo potenziale. Elliott esorta gli azionisti a garantire la possibilità di votare le proprie azioni e chiede a Southwest di confermare tempestivamente la data dell'assemblea.

Elliott Investment Management L.P., que gestiona fondos con un interés económico del 11% en Southwest Airlines Co. (NYSE: LUV), ha convocado una Junta Extraordinaria de Accionistas para el 10 de diciembre de 2024. Elliott busca elegir a ocho directores independientes y remover a ocho directores actuales del Consejo de Southwest. Este movimiento surge tras intentos fallidos de convencer a Southwest de implementar los cambios de gobernanza necesarios.

La lista propuesta por Elliott incluye ejecutivos experimentados de las industrias de aviación y hotelería. La firma de inversión argumenta que Southwest necesita una mejor supervisión y responsabilidad para cumplir con sus promesas y potencial. Elliott urge a los accionistas a asegurarse de poder votar sus acciones y llama a Southwest a confirmar la fecha de la reunión sin demora.

엘리엇 투자 관리 L.P.는 사우스웨스트 항공 (NYSE: LUV)에 11%의 경제적 지분을 보유하고 있으며, 2024년 12월 10일 주주 특별 모임을 소집하였습니다. 엘리엇은 사우스웨스트 이사회에서 8명의 독립 이사를 선출하고 8명의 현 이사를 해임하고자 합니다. 이 결정은 사우스웨스트가 필요한 기업 거버넌스 변화를 구현하도록 설득하려는 시도가 실패한 후에 이루어졌습니다.

엘리엇의 제안된 후보자 명단은 항공 및 환대 산업에서의 경험이 풍부한 임원들로 구성되어 있습니다. 이 투자 회사는 사우스웨스트가 약속과 잠재력을 이행하기 위해 더 나은 감독과 책임이 필요하다고 주장합니다. 엘리엇은 주주들이 자신의 주식을 투표할 수 있도록 보장하고, 사우스웨스트에 회의 날짜를 신속하게 확인할 것을 촉구하고 있습니다.

Elliott Investment Management L.P., qui gère des fonds avec un intérêt économique de 11 % dans Southwest Airlines Co. (NYSE: LUV), a convoqué une Assemblée Générale Extraordinaire des Actionnaires le 10 décembre 2024. Elliott vise à élire huit administrateurs indépendants et à retirer huit administrateurs actuels du conseil d'administration de Southwest. Cette initiative survient après des tentatives infructueuses de persuader Southwest de mettre en œuvre des changements de gouvernance nécessaires.

La liste proposée par Elliott comprend des cadres expérimentés des secteurs de l'aviation et de l'hospitalité. La société d'investissement soutient que Southwest a besoin d'une meilleure supervision et responsabilité pour tenir ses promesses et réaliser son potentiel. Elliott exhorte les actionnaires à s'assurer qu'ils peuvent voter leurs actions et appelle Southwest à confirmer rapidement la date de la réunion.

Elliott Investment Management L.P., das Fonds mit einem wirtschaftlichen Interesse von 11% an Southwest Airlines Co. (NYSE: LUV) verwaltet, hat eine außerordentliche Hauptversammlung der Aktionäre für den 10. Dezember 2024 einberufen. Elliott beabsichtigt, acht unabhängige Direktoren zu wählen und acht derzeitige Direktoren aus dem Vorstand von Southwest abzuberufen. Diese Maßnahme folgt auf gescheiterte Versuche, Southwest zu überzeugen, die notwendigen Änderungen in der Unternehmensführung umzusetzen.

Die vorgeschlagene Liste von Elliott umfasst erfahrene Führungskräfte aus der Luftfahrt- und Gastgewerbeindustrie. Die Investmentgesellschaft argumentiert, dass Southwest eine verbesserte Aufsicht und Verantwortung benötigt, um seinen Versprechen und Potenzial gerecht zu werden. Elliott fordert die Aktionäre auf, sicherzustellen, dass sie ihre Anteile abstimmen können, und ruft Southwest dazu auf, das Datum der Sitzung umgehend zu bestätigen.

Positive
  • Elliott's 11% economic interest in Southwest Airlines shows significant investor confidence
  • Proposed slate of directors includes experienced executives from aviation and hospitality industries
  • Special Meeting provides shareholders opportunity to vote on board changes
Negative
  • Elliott's action suggests dissatisfaction with current Southwest management and board
  • Potential for disruption in Southwest's leadership and strategy
  • Indicates ongoing governance and performance issues at Southwest Airlines

Insights

Elliott's call for a Special Meeting of Shareholders and proposal to elect new directors at Southwest Airlines is a significant development that could have far-reaching implications for the company's governance and strategy. This move by an activist investor with an 11% economic interest signals deep dissatisfaction with the current board and management.

The proposed slate of directors includes industry veterans with extensive airline and travel sector experience, which could potentially bring fresh perspectives and operational expertise to Southwest. However, this also represents a major challenge to the existing leadership and could lead to significant strategic shifts if successful.

For investors, this situation creates both opportunities and risks. A board shake-up could potentially unlock value by improving oversight and pushing for needed changes. Conversely, it may also lead to short-term volatility and uncertainty as the power struggle plays out. The outcome of this proxy fight will be important in determining Southwest's future direction and performance.

This move by Elliott represents a significant escalation in shareholder activism at Southwest Airlines. The proposal to replace eight current directors with a new slate is an aggressive tactic that highlights serious concerns about the company's governance and performance.

The timing of this action, following what Elliott describes as "exhaustive attempts" to persuade Southwest to implement changes, suggests a breakdown in constructive dialogue between the activist investor and the company's leadership. This public confrontation could lead to a contentious proxy battle, potentially distracting management and the board from operational issues.

Investors should closely monitor how other major shareholders respond to this proposal. The outcome will depend on whether Elliott can convince a majority of shareholders that its proposed changes are necessary and beneficial for the company's long-term success. This situation underscores the growing influence of activist investors in shaping corporate governance and strategy in the airline industry.

Submits Proposals to Elect Eight Independent Best-in-Class Nominees and Remove
Eight Current Directors

Calls on Southwest to Confirm Meeting Date Promptly Without Unnecessary
Delay

Shareholders Should Take Action As Soon As Possible to Ensure They Are Able to
Vote Their Shares

WEST PALM BEACH, Fla., Oct. 14, 2024 /PRNewswire/ -- Elliott Investment Management L.P. ("Elliott"), which manages funds that together have an investment representing an approximately 11% economic interest in Southwest Airlines Co. (NYSE: LUV) (the "Company" or "Southwest"), today announced it has delivered a request to call a Special Meeting of Shareholders ("the Special Meeting," or "the Meeting") for December 10, 2024 and will be filing an accompanying preliminary proxy statement with the U.S. Securities and Exchange Commission.

Elliott released the following statement on behalf of Partner John Pike and Portfolio Manager Bobby Xu:

"Today, after exhaustive attempts to persuade Southwest to implement the necessary governance changes, we are formally calling a Special Meeting to give shareholders the opportunity to elect a completely independent, best-in-class slate of director nominees. Absent a thorough reconstitution of its Board, the story of Southwest will remain one of empty promises and unfulfilled potential. The nominees we have put forward today are uniquely qualified to hold the Company's executive leadership accountable and ensure that the Company delivers improved results.

We are taking this step today because the need for improved oversight at Southwest has never been more urgent. Following Elliott's public push for changes, Southwest has responded with a series of long-overdue strategic and corporate-governance initiatives, promising that better performance will follow. However, Southwest's shareholders have heard these sorts of promises before, and what they need today, at the outset of this attempted turnaround, is an experienced, highly qualified Board to oversee the changes and ensure successful execution. Southwest's shareholders cannot afford to see – yet again – today's new initiatives turn into tomorrow's broken promises.

We strongly urge all Southwest shareholders – particularly those who engage in share lending or authorize their brokers to engage in share lending – to work with their banks and brokers as soon as possible to confirm that they will be able to vote all their Southwest shares. We also call on Southwest to confirm the date of the Meeting for December 10, 2024, and to publicly announce a reasonable corresponding record date promptly, without any gamesmanship or defensive maneuvers.

It is time for shareholders' voices to be heard, so that Southwest can finally deliver on its full potential for customers, employees and shareholders alike. Electing a world-class slate of exceptional director candidates is the essential first step to making this happen."

Elliott has submitted a proposal to elect the following eight director candidates to Southwest's Board:  

  • Michael Cawley, the former deputy CEO, COO and CFO of Ryanair
  • David Cush, the former CEO of Virgin America
  • Sarah Feinberg, a former senior official at the Department of Transportation and former head of the Federal Railroad Administration
  • Hon. Josh Gotbaum, a longtime advisor to companies and labor groups and the former chapter 11 trustee of Hawaiian Airlines
  • Dave Grissen, the former Group President of Marriott International
  • Robert Milton, the former CEO of Air Canada and ACE Aviation Holdings and the former Chairman of United Airlines
  • Gregg Saretsky, the former CEO of WestJet
  • Patty Watson, the current EVP and Chief Information & Technology Officer at NCR Atleos and a longtime technology executive

Elliott has also submitted a proposal for the removal of eight current Southwest directors: Douglas Brooks, Eduardo Conrado, William Cunningham, Thomas Gilligan, David Hess, Gary Kelly, Elaine Mendoza and Jill Soltau.

Any shareholders who have questions about what they need to do to vote their shares should contact Elliott's proxy solicitor, Okapi Partners, by calling toll-free (877) 629-6357 or by emailing info@okapipartners.com.

CERTAIN INFORMATION CONCERNING THE PARTICIPANTS

Elliott Investment Management L.P., together with the other participants named herein (collectively, "Elliott"), intend to file a proxy statement and accompanying proxy card with the Securities and Exchange Commission ("SEC") to be used to solicit proxies with respect to the election of Elliott's slate of highly qualified director candidates and other proposals that may come before the next shareholder meeting of Southwest Airlines Co., a Texas corporation (the "Company"), whether an annual or special meeting of shareholders.

THE PARTICIPANTS STRONGLY ADVISE ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING A PROXY CARD, AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.

The participants in the solicitation are anticipated to be Elliott Investment Management L.P. ("EIM"), Elliott Associates, L.P. ("Elliott Associates"), Elliott International, L.P. ("Elliott International"), The Liverpool Limited Partnership ("Liverpool"), Elliott Investment Management GP LLC ("EIM GP"), Paul E. Singer ("Singer"), Michael Cawley, David Cush, Sarah Feinberg, Joshua Gotbaum, David Grissen, Robert Milton, Gregg Saretsky and Patricia Watson.

As of the date hereof, Elliott has combined economic exposure in the Company of approximately 11.0% of the shares of its Common Stock, $1.00 par value per share (the "Common Stock"), outstanding. As of the date hereof, EIM, the investment manager of Elliott Associates and Elliott International (together, the "Elliott Funds") with respect to the shares of Common Stock held by the Elliott Funds and/or their respective subsidiaries, beneficially owns 61,116,500 shares of Common Stock. Additionally, as of the date hereof, the Elliott Funds are party to notional principal amount derivative agreements in the form of cash settled swaps with respect to an aggregate of 4,808,000 shares of Common Stock (the "Derivative Agreements"). Elliott Associates, Elliott International and Liverpool are the direct holders of the shares of Common Stock beneficially owned by EIM, and are party to the Derivative Agreements. Liverpool is a wholly-owned subsidiary of Elliott Associates. EIM GP is the sole general partner of EIM. Singer is the sole managing member of EIM GP. As of the date hereof, Mr. Cawley holds 19,765 shares of Common Stock, Mr. Cush holds 10,000 shares of Common Stock, Ms. Feinberg beneficially owns 3,068 shares of Common Stock, including 2,800 shares of Common Stock held directly and 268 shares of Common Stock held by her domestic partner, Mr. Gotbaum holds 19,162 shares of Common Stock, Mr. Milton holds 1,953 shares of Common Stock, Mr. Saretsky holds 4,000 shares of Common Stock and Ms. Watson beneficially owns 5,243 shares of Common Stock, including 3,964 shares of Common Stock held directly and 1,279 shares of Common Stock held by her spouse.

About Elliott

Elliott Investment Management L.P. (together with its affiliates, "Elliott") manages approximately $69.7 billion of assets as of June 30, 2024. Founded in 1977, it is one of the oldest funds under continuous management. The Elliott funds' investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, high net worth individuals and families, and employees of the firm. 

Media Contact:        
Casey Friedman                                             
Elliott Investment Management L.P.                                     
(212) 478-1780                                              
cfriedman@elliottmgmt.com

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SOURCE Elliott Investment Management L.P.

FAQ

When is the proposed Special Meeting of Shareholders for Southwest Airlines (LUV)?

Elliott Investment Management has requested a Special Meeting of Shareholders for Southwest Airlines (LUV) on December 10, 2024.

How many directors does Elliott propose to elect to Southwest Airlines' (LUV) board?

Elliott proposes to elect eight independent directors to Southwest Airlines' (LUV) board.

What is Elliott Investment Management's economic interest in Southwest Airlines (LUV)?

Elliott Investment Management manages funds that together have an approximately 11% economic interest in Southwest Airlines (LUV).

Who are some of the proposed director candidates for Southwest Airlines (LUV)?

Proposed candidates include Michael Cawley (former Ryanair executive), David Cush (former Virgin America CEO), and Robert Milton (former Air Canada CEO).

Southwest Airlines Co.

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