Southwest Airlines 'Succession'-style investor battle takes first victims

Within the last month, Southwest Airlines (LUV) has been going through a boardroom battle worthy of the hit HBO show "Succession."

Over and over echoing its want to see chief executive Bob Jordan and board chairman Gary Kelly ousted over what it classified as "poor execution and leadership's stubborn unwillingness to evolve," hedge fund Elliott Investment Management at last bought up enough company stock on a strategy to call a different shareholder meeting at last put the question to a vote.

Related: Southwest Airlines' Succession-style boardroom battle

Southwest, which has during the past said that it's far "confident that [it] has the best leadership team in place," has replied to growing investor pressure by shaking up its board of directors.

Here is what it's possible you would would love to learn about Southwest's board shake-up

While Jordan survived to see the other day as CEO, Kelly has resigned from his role as board chairman by announcing early retirement. Six more directors of the board will leave their roles in a main shake-up; these consist of Compensation Committee Chairman David Biegler, Nominating and Corporate Governance Committee Chair Veronica Biggins, Senator Roy Blunt and Lead Director Dr. William Cunningham.

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While it has now not yet floated any potential names, Southwest also said that it plans to feature four new directors to the board in "the near future" and will accept as true with candidates suggested by Elliott for their places. The investment firm had during the past expressed its want to see former Ryanair (RYAOF) and Virgin The U. S. chief executives Michael Cawley and David Cush, respectively, on the board.

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'Engaged a leading self reliant search firm to % out new candidates'

"As well as taking under consideration Elliott's Director candidates, the Nominating and Corporate Governance Committee has engaged a leading self reliant search firm to % out and review strong candidates who can bring complementary skills and experience to guide the airline forward," Southwest said in a statement that also wished departing board members "the total precise in their future endeavors."

In a statement on his departure, Kelly said that it's far "time to shake things up, now not only stir them somewhat."

The shakeup comes amid reasonably a few other major changes that Southwest has made based on mounting investor pressure over its poor financial performance. In July, Jordan dropped the axe in announcing that the airline may possibly be replacing its decades-old open seating policy by one wherein customers pay to % their seat. Many are now speculating that the airline's two-bags-regardless-of-fare-class perk is also next to head in drastic steps to start up bringing in profit.

Elliott had in most cases often is often referred to as this commitment "too little, too late" to undo months of dropping revenue and overall business strategy it doesn't accept as true with.

Southwest stock, which is already down by more than three% from the identical time last year, fell by four.31% to $28.35 in the morning of Sept. 10.

Elliott replied to the news of the board shake-up with a statement a lot like past ones.

"The need for thoughtful, deliberate change at Southwest remains urgent, and we have got self belief the highly qualified nominees we have got put forward are the best people to steady the Board and chart a fresh course for the airline," the investment firm writes on its web page.