Famous activist investor Elliot Management cited a floundering stock price as its main evidence that Southwest Airlines chairman Gary Kelly needed to go. The airline’s shares dropped 3% Tuesday, however, after Southwest said he would retire next year as part of a revamp of the company’s board. The announcement came a day after Kelly and two other board members met with the hedge fund.
Elliot announced in June that it had built a 11% stake in the airline and called for the departures of Kelly and CEO Bob Jordan, as well as an overhaul of Southwest’s distinct business model. On Tuesday, Southwest’s stock was currently below the $29 mark, down over 50% from its post-pandemic high in April 2021 and more than 10% below where it sat a decade ago. It's worth noting, however, that Southwest shares have outperformed the industry's index during that span.
