Southwest executive buys 3.6 million shares, opposes more leadership changes

NEW YORK (Reuters) – Southwest Airlines Chief Executive Rakesh Gangwal, who was tapped by the company to join its board amid mounting pressure from an activist investor, bought more than $100 million in stock and said on Wednesday that more senior leadership changes will be “counterproductive.”

Gangwal, who co-founded Indian low-cost carrier InterGlobe Aviation, or IndiGo, purchased 3.6 million Southwest shares on Sept. 30 and Oct. 1, according to Securities and Exchange Commission filings. It paid between $29 and $30 per share.

He said he made the purchases as soon as the so-called trading window opened, when executives and other insiders are allowed to buy and sell the stock.

Southwest put Gangwal on the board in July as activist investor Elliott Investment Management increased pressure on the carrier, calling for management and strategy changes to improve financial performance. The company announced a board overhaul and other changes last month.

Last month, Southwest said Executive Chairman Gary Kelly would step down and six other executives would step down from its 15-member board.

Elliott has held firm on calls for more changes in the top ranks, including the ouster of CEO Bob Jordan. Last week it said it planned to call a special meeting of shareholders to press for those changes.

Gangwal told Reuters on Wednesday that more turmoil in the executive suite and boardroom would hurt shareholders. “I believe that changing the board structure and senior management beyond what has already been announced would be counterproductive and not in the best interests of shareholders.”

(Reporting by Svea Herbst-Bayliss)