Top Southwest shareholder signals support for Elliott activist campaign

A top Southwest Airlines shareholder on Wednesday signaled its support for Elliott Management's activist campaign to oust CEO Bob Jordan and executive chairman Gary Kelly, as the carrier struggles with underperformance compared with some of its rivals.

Artisan Partners' Daniel O'Keefe and Michael McKinnon said in a letter to Southwest's board that the firm noted Elliott's Monday campaign launch "with great interest." The two said Artisan had in recent months told Kelly privately "many of the same points" that Elliott made publicly.

"We are writing today to urge the Board to reconstitute itself and upgrade the Company's leadership," O'Keefe and McKinnon wrote.

Artisan, a $158.6 billion asset manager, owns a 1.8% stake in Southwest, making it the 10th-largest shareholder of record. It has held a stake in the airline on-and-off since 2001, according to FactSet data, amassing its current holdings beginning in 2020.

O'Keefe and McKinnon oversee Artisan's Global Value Team, which manages $28 billion in assets.

Elliott has an economic interest in Southwest worth $1.9 billion and is seeking a comprehensive business review in addition to the ouster of Jordan and Kelly.

Earlier on Wednesday, Jordan said he had no plans to resign in the face of Elliott's campaign, adding that Elliott was welcome to present its ideas but would not be "directing the company," Reuters reported.

Southwest representatives did not immediately return a request for comment. The move is likely to add pressure to the company, however. Elliott said in its presentation that it had surveyed shareholders, as well as employees and customers, before revealing its stake.

Other top Southwest shareholders include Putnam Investment Management and T. Rowe Price, as well as BlackRock and Vanguard. Together, not including Elliott's economic interest, institutional shareholders control around 60% of Southwest's shares outstanding.

— CNBC's Leslie Josephs contributed to this report.