DALLAS — Southwest Airlines has recently disclosed its new agreement with Elliott Investment Management LP, marking significant changes in its board composition and member benefits. As part of this agreement, newly appointed board members will enjoy a range of perks, including complimentary flights and substantial financial compensation, according to an October 24 filing. Elliott, which owns an 11% stake in the airline, previously posed a threat of a proxy fight but withdrew its demand for a special shareholder meeting after reaching this agreement with Southwest. Under the terms of this agreement, effective November 1, Southwest will welcome David Cush, Sarah Feinberg, David Grissen, Gregg Saretsky, and Patricia Watson to its board of directors.

Their tenures are set to last until the 2025 annual meeting. The agreement also outlines adjustments to the board's size, reducing from 16 to 15 members, with a further reduction to 13 members expected post-2025 annual meeting. The shift coincides with the retirement of Executive Chairman Gary Kelly and the resignation of several long-serving directors. An 8-K filing with the U.S. Securities and Exchange Commission reveals that Southwest board members receive a $90,000 annual retainer fee, with additional compensation of $1,500 for attending extra meetings. Board members are granted equity awards, retirement payments, and comprehensive travel benefits. They and their families benefit from free Southwest flights during and after their board service, with the extent of benefits linked to their terms of service.

Directors serving over ten terms gain lifetime travel privileges. Elliott's push for board changes began in June, aligning with their $2 billion investment in Southwest. The recent board restructuring aims to integrate directors with diverse competencies, enhancing the strategic capabilities of the leadership team. Southwest's leadership expresses optimism about these changes, emphasizing a commitment to transformational plans and improved financial outcomes. This strategic partnership aims to ensure effective governance and drive the airline's growth amid industry challenges.