Friday, August 16, 2024
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Artisan Partners‘ Global Value Team announces a 1.8% stake in Southwest Airlines, emphasizing the need for new board leadership to drive improved performance.
The following statement comes from the Global Value Team at Artisan Partners Limited Partnership, whose clients, under discretionary investment management, collectively own over 10.8 million shares of Southwest Airlines Co., representing approximately 1.8% of the Company’s total outstanding shares:
The existing Southwest board does not present a viable alternative to this group of nominees. This is not a matter of conjecture. The current board has overseen a management team that has consistently delivered declining financial performance over the short, medium, and long term. The only rationale for opposing the Elliott nominees and supporting the current structure is self-preservation. However, Southwest Airlines’ purpose is not to advance the careers of its board and management team, but to serve the long-term interests of its shareholders, employees, and customers. We believe these interests are best served by a change in direction.
In our extensive investment experience, we have rarely encountered a proposed board slate as exceptionally qualified as this one. We believe that, with a moment of honest reflection, the current board members will recognize the merits of these nominees.
We strongly urge the board to collaborate with Elliott to promptly appoint all or a substantial majority of the proposed nominees, who can then steer the Company with new leadership under a fresh Chairman and CEO. Should the board refuse, we will fully support the Elliott nominees if an extraordinary shareholder meeting is convened.
Given the Company’s poor performance under the current management, we believe the outcome of this situation is largely inevitable. Shareholders are calling for and deserve new leadership. Any attempts to obstruct this transition will only result in additional costs and distractions, to the detriment of employees, customers, and shareholders.
