Southwest responds to Elliott Management meeting request

The company states: “Southwest Airlines confirmed that Elliott Investment Management L.P. requested a Special Meeting of Shareholders to consider Elliott’s proposals, including to remove without cause eight members of Southwest’s Board of Directors and elect eight Director candidates chosen by Elliott, which appears designed to result in full control of the Board by Elliott’s nominees. Southwest’s Board issued the following statement in response: ‘Elliott’s Special Meeting request is unnecessary and inappropriate considering the extreme nature of Elliott’s demands. The timing of Elliott’s request to apparently pursue Board control appears designed to maximize disruption of Southwest’s execution of its important business transformation underway as we approach one of the busiest travel periods of the year. Elliott’s actions highlight its lack of understanding of Southwest’s business and its insatiable need to put its own interests ahead of those of all Shareholders. Before and since Elliott launched its campaign in June, the Board has had extensive dialogue with a significant number of Southwest Shareholders. The Board’s actions have been rooted in feedback from these conversations, including the comprehensive Board and governance changes recently announced. Southwest also heard Shareholders’ resounding preference that the Company engage with Elliott and seek to avoid a protracted dispute. The Board has made every effort to reach a constructive resolution, including providing a reasonable settlement framework under which the Board would interview Elliott’s candidates and appoint up to three to a reconstituted 13-member Board that would be reduced to 12 following Executive Chairman Gary Kelly’s retirement at the 2025 Annual Meeting of Shareholders. For Elliott’s part, its latest framework for settlement reflects its continuing interest in seeking effective control of both the Board and management, including by installing Robert Milton, former CEO of Air Canada and a member of Elliott’s Board slate, as Executive Chair of Southwest. Unfortunately, Elliott remains entrenched in demanding control of the Board, while continuing to block its Director candidates from being interviewed by the Board’s Nominating and Corporate Governance Committee, making it impossible to find a constructive resolution. For nearly four months, Elliott has failed to offer any substantive feedback on Southwest’s strategic plan. The Company was encouraged that Elliott might be turning the page ahead of Investor Day, when it requested a preview of Southwest’s Investor Day materials as a condition to engaging in settlement discussions. After providing Elliott a detailed, in-person preview of the Company’s plan more than a week before Investor Day, Elliott failed to provide input and continued its public attacks ahead of and following Investor Day. Elliott’s failure to provide actionable feedback, coupled with the disruptive nature of its demands, should give Shareholders pause about Elliott’s true intentions. The Board will carefully review the Special Meeting request in accordance with its fiduciary duties, Texas law and the Company’s bylaws, including Elliott’s stated request to hold the meeting on December 10, 2024. The Board intends to discuss the process for setting a Special Meeting with Elliott in a constructive manner. The Board is committed to acting in the best interests of Southwest and its Shareholders and will provide further updates in due course. No immediate action is required of Shareholders.’ “