11:20 AM EDT, 09/10/2024 (MT Newswires) -- Southwest Airlines ( LUV ) announced a board shakeup on Tuesday that includes the retirement of Executive Chairman Gary Kelly and its intention to appoint four new independent directors, including nominations from activist shareholder Elliott Investment Management.

Kelly will voluntarily retire from the board immediately after the carrier's 2025 annual meeting. "Our board will decide a new chair at that time," Kelly said in a letter to shareholders. Six other directors will step down this November.

The airline plans to appoint four new independent directors in the near future, including up to three of Elliott's candidates, Kelly said. Shares of Southwest ( LUV ) fell 3.8% in Tuesday trade.

"In our meeting with Elliott yesterday, we shared a specific framework to address its concerns about corporate governance and performance, and we are continuing to engage constructively toward a collaborative resolution in the near term," Kelly said in the letter.

Elliott, which previously announced its intention to nominate 10 independent directors, had called for the executive chairman role to be terminated and Chief Executive Bob Jordan to step down. Southwest's ( LUV ) board on Tuesday reiterated its unanimous support for Jordan. The current CEO, along with the executive leadership team, is "vital to executing the transformative business plan," Kelly wrote.

Lead Director William Cunningham and directors David Biegler, Veronica Biggins, Senator Roy Blunt, Thomas Gilligan and Jill Soltau will all retire in November.

In a separate statement, Elliott called Southwest's ( LUV ) board resignations "unprecedented" and said it was pleased the company is beginning to recognize "the degree of change that will be required at Southwest ( LUV )." The activist shareholder in July threatened a proxy fight if Southwest ( LUV ) didn't begin cooperating.

The number of directors serving on Southwest's ( LUV ) board will be reduced to 13 following the November board meeting and then to 12 following Kelly's retirement in 2025.

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