Elliott to call for Southwest special meeting 'as soon as next week'

Elliott Management said Tuesday it will call a special meeting at Southwest Airlines "as soon as next week," shortly after the company put forward a sweeping board shake-up that it hoped might stave off a proxy fight.

The push comes days before the airline's investor meeting, where it is expected to unveil improvements and operating changes. Elliott is seeking to oust CEO Bob Jordan and Executive Chairman Gary Kelly, the latter of whom has already committed to stepping down in 2025. The activist has put forward a 10-director slate comprised of airline executives and former regulators or government officials.

"We believe that competent new leaders, working through a deliberate and thoughtful process, should chart the course forward for Southwest," Elliott partner John Pike and portfolio manager Bobby Xu said in a letter to shareholders.

"We do notsupport the Company's current course, which is being charted in a haphazard manner by a group of executives in full self-preservation mode," Pike and Xu wrote.

Southwest's shareholder meeting is typically scheduled for May, but by calling for a special meeting Elliott is looking to elect new directors much sooner than that. It takes a few months for both sides to solicit shareholder support, and a settlement is always possible in the interim.

Elliott said Southwest's advisors were maneuvering to limit the number of shareholders eligible to vote, via something known as a "false record date."

Southwest Airlines in July unveiled major changes to its more than 50-year-old business model: It will soon ditch open seating for assigned seats, offer seats with more legroom that command higher fares and start operating red-eye flights. Last week, COO Andrew Watterson warned staff to brace for