Southwest Reaches Deal With Activist Elliott, Adding 6 New Directors to Board [Video]

Southwest Airlines (LUV) announced a settlement with Elliott Investment Management Thursday morning, ending a months-long battle with the activist investor that has been calling for significant leadership and business strategy changes at the carrier.

Southwest agreed to reduce its board to 13 seats by its 2025 shareholder meeting, with Elliott-sponsored candidates set to take five of those spots, with a sixth replacement seat going to former Chevron (CVX) CFO Pierre Breber. The new board members will replace six retiring members— including Executive Chairman Gary Kelly, who previously served as Southwest’s CEO—on November 1, the company said.

As part of the settlement, Elliott has agreed to drop its call for a December special shareholder meeting as Elliott Partner John Pike and Portfolio Manager Bobby Xu said they believe the airline is now well positioned to “enhance business performance, drive operational execution and evaluate additional changes to create long-term shareholder value.”

News of the settlement came shortly …