Elliott says received supportive feedback about call for change at Southwest

Elliott Investment Management sent a letter to the Board of Southwest Airlines Co. summarizing the feedback received and key events that have occurred since the publication last month of Elliott’s initial letter and presentation calling for leadership change. The company said, “According to the letter, the feedback Elliott has received is overwhelmingly consistent with its perspective that the Company’s performance is unacceptable and leadership change is required to return Southwest to its once-leading position in the industry. Elliott noted that the actions of Southwest’s Board of Directors and management team since its Stronger Southwest materials were published have only solidified the case for leadership change. According to the letter, these actions included adopting an antiquated and shareholder-unfriendly “poison pill” to prevent Elliott from increasing its stake above 12.5% on July 3, and appointing a new director to the Board today who appears to have been chosen in part due to his support for the Company’s status-quo leadership and plan. These actions demonstrate how profoundly out of touch Southwest’s Board has become with shareholder sentiment and with the reality of the situation, said the letter. It is crucial, Elliott wrote, that the Board understand that Southwest’s leadership has already lost the trust of its shareholders, and that shareholders simply do not believe this Board and management team are capable of devising and executing a bold new plan to turn around Southwest. Elliott again outlined the following path to a higher-performing future for Southwest: Enhance the Board of Directors; Upgrade Leadership; Undertake a Comprehensive Business Review. Elliott indicated that it is open to collaborating with the Board on a path forward, but absent alignment Elliott intends to move expeditiously to give shareholders a direct say on the necessary leadership changes.”