Southwest Airlines Co. today announced the next phase of the Board’s transformation, including significant ongoing refreshment.
The Board presented its plans at a meeting yesterday and invited Elliott Investment Management L.P. to participate in refreshment efforts and other corporate governance changes.
Southwest Airlines intends to continue its constructive engagement with Elliott toward a collaborative resolution in the near term.
Southwest Airlines Executive Chairman Gary Kelly also is sending a letter to Shareholders today detailing these changes, which can be viewed here, highlighting the following:
Executive Chairman Gary Kelly has announced his intention to voluntarily retire from the Board and his Executive Chairman position effective immediately after the 2025 Annual Meeting. Six current Directors have informed the Board of their plans to voluntarily step down immediately after the Company’s regularly scheduled Board meeting in November:
David Biegler (Compensation Committee Chairman), Veronica Biggins (Nominating and Corporate Governance Committee Chair), Senator Roy Blunt, Dr. William Cunningham (Lead Director), Dr. Thomas Gilligan (Audit Committee Chairman), Jill Soltau.
The Board anticipates appointing four new independent Directors in the near future.
In addition to considering Elliott’s Director candidates, the Nominating and Corporate Governance Committee has engaged a leading independent search firm to identify and review strong candidates who can bring complementary skills and experience to lead the airline forward.
The airline has added or appointed eight highly qualified Directors over the past three years, including the recent appointment of Rakesh Gangwal, co-founder of India’s largest airline, InterGlobe Aviation (IndiGo).
With these changes, the Company expects the number of Directors serving on the Board to be reduced to 13 following the regularly scheduled November Board meeting and to 12 following the 2025 Annual Meeting.
Inclusive of all of these changes, 75% of the airline’s Directors will have three years or less tenure on the Board as of the 2025 Annual Meeting and the average Board tenure will be approximately 2.5 years, reduced from 7.3 today.
Consistent with feedback from Shareholders, the Board has eliminated the Executive Committee structure and created a new Finance Committee with a mandate focused on assisting the Board with oversight of financial, operational, and business plans and strategies, major transactions, capital structure and capital allocation priorities, among other duties. In connection with the planned Director retirements in November and other Board committees being reconstituted at that time, the Finance Committee also will be reconstituted to include both new and incumbent Directors with relevant strategy and financial expertise.
The Board will name a new Lead Director and new Committee Chairs for each of the Audit, Compensation, and Nominating and Corporate Governance Committees at that time as well.
