Southwest Airlines chairman Gary Kelly is no stranger to strife. During COVID, with the airline facing a 97% drop in traffic, Kelly implemented an ambitious growth plan that stewarded Southwest through the worst of the pandemic. Now the longtime executive is facing a new challenge, with the activist investment firm Elliott Management seeking to push him out along with CEO Bob Jordan.
On Wednesday, Southwest disclosed in a press release that it would adopt a shareholder rights plan that would dilute Elliott's power if the firm exceeded 12.5% ownership of Southwest's outstanding stock—a so-called "poison pill." Elliott announced it had taken an 11% stake in Southwest in June. Southwest shares are trading flat on Wednesday at the time of publication, although they are down roughly 18% from a six-month high of almost $35 on March 7.
