After bracing for a proxy war with Elliott Investment Management, Southwest Airlines has backed down by accepting the resignation of board chairman Gary Kelly and six board members.

Southwest Airlines is backing down on some of Elliott Investment Management’s demands in accepting the resignation of their current board chairman and former CEO, along with six outgoing independent board members.

The airline announced Gary Kelly will voluntarily retire from the board after the company’s 2025 annual meeting with six board members, including the lead director and three committee chairs.

Kelly Ends 38 Years with Southwest Airlines

In a letter sent to Southwest Airlines shareholders, Kelly said the decisions came after a meeting with leadership at Elliott in their New York office. Referencing his role as board chairman, the former CEO said his role “has always been transitional, which begs the question as to our vision of the role going forward.”

“While my heart will always be with Southwest and a part of me would love to continue supporting this great Company day-to-day, I recognize it is critical to demonstrate my immense confidence and support for Bob Jordan as CEO to all our Stakeholders,” Kelly’s letter reads. “So, as we enter this next era, my role will come to a close at the end of my term…The next generation is more than ready to take the mantle of leadership and is already executing the plan that continues to build on our legacy of success.”

With his resignation, Kelly ends 38 years of working for the airline, starting as controller with the carrier. He ultimately became chief executive officer and vice chairman of the board in 2004, before moving up to the role of president and board chairman in 2008, taking over for co-founder Herb Kelleher.

Although he is leaving the airline, both Kelly and the airline leadership says they are standing firmly behind current CEO Bob Jordan. As part of their plan, Elliott had also sought the ouster of Jordan along with Kelly.

“The Board and leadership of Southwest unanimously support Bob Jordan as CEO,” Kelly wrote in the letter. “Bob has a proven track record over decades and, most importantly, he has what it takes to lead Southwest through a significant transformation and usher in a new era of profitable growth, innovation, and industry leadership.”

Along with Kelly’s resignation, six directors will also stand down after the 2024 annual meeting. The airline says they will add four independent directors to the board and will consider Elliott’s nominees along with working with an independent search firm to “identify and review strong candidates.”

Keep up to date with the conflict between Southwest and Elliott on the FlyerTalk forums.