Elliott Investment Management on Monday alerted Southwest Airlines’ board on Monday that it wants to replace CEO Robert Jordan following its purchase of a $1.9 billion stake in the American carrier. Jordan, however, said that he will not resign from his position.
The airline’s leadership team is developing a plan to improve Southwest’s financial performance, Jordan said, which will be presented in September. He once again indicated that the plan could include shifts in the airline’s boarding and seating policies.
Elliott also told the Southwest board that, along with Jordan, it seeks to replace Southwest’s chairman and former CEO Gary Kelly, with executives from outside the company. Noting that Southwest’s share price has dropped more than 50% in the past three years, the hedge fund maintains that Southwest’s executives have failed to adjust to changing customer preferences.
“Elliott can provide us ideas,” Jordan said. “They can talk to other shareholders, but Elliott is not directing the company.”
