– CNBC reported that Southwest Airlines and activist hedge fund firm Elliott Investment Management reached a deal to avert a proxy fight in exchange for naming six directors to the company’s board – short of board control – and an earlier retirement for executive chair Gary Kelly. As part of the deal, Southwest CEO Bob Jordan will keep his job.
‘We are pleased to have come to an agreement with Southwest on the addition of six new directors that will enhance and revitalize its board,’ Elliott’s John Pike and Bobby Xu said in a statement. Five of Elliott’s board nominees along with former Chevron CFO Pierre Breber will join the board, which will have a total of 13 members, Southwest said.
The Southwest board will appoint a new chair to replace Kelly, who will now step down next month instead of next year. Elliott had called for both Kelly and Jordan to be removed and criticized the airline’s leadership for not moving fast enough on sales- and profit-boosting strategies.
– The Wall Street Journal (paywall) reported that The Walt Disney Company said it would name longtime CEO Bob Iger’s successor in early 2026 and will replace its board chair. Iger’s contract expires at the end of 2026. Disney said former Morgan Stanley CEO James Gorman, chair of its succession committee, would become board chair on January 2, 2025, succeeding Mark Parker, who plans to resign. Parker, executive chair of Nike, was elected chair of the Disney board in early 2023.
Gorman said appointing a new CEO is a critical priority for Disney. ‘This timing reflects the progress the succession planning committee and the board are making and will allow ample time for a successful transition before the conclusion of Bob Iger’s contract in December 2026,’ he said. The company is reviewing external candidates for the role in addition to current executives.
– According to Reuters (paywall) the US Supreme Court agreed to consider whether the US Environmental Protection Agency (EPA) could steer certain lawsuits challenging agency efforts to reduce air pollution and greenhouse gas emissions away from regional appeals courts favored by opponents of its actions and to a court in Washington, DC that regularly hears regulatory disputes.
The justices agreed to hear appeals by the Republican-led states of Oklahoma and Utah and several energy companies of a lower-court ruling that transferred their challenges to the EPA's ‘Good Neighbor’ smog control plan to the US Court of Appeals for the District of Columbia Circuit. The justices also agreed to consider whether a New Orleans-based federal appeals court should have sent to Washington a lawsuit by small refiners challenging the EPA's denial of waivers that would exempt them from national biofuel mandates before deeming the agency's action unlawful.
– The SEC’s division of examinations published its 2025 priorities. This coming year’s examinations will prioritize perennial and emerging risk areas such as fiduciary duty, standards of conduct, cyber-security and AI. The division examines SEC-registered investment advisers, investment companies, broker-dealers, clearing agencies and self-regulatory organizations.
For fiscal year 2025, in addition to conducting exams in core areas such as disclosures and governance practices, the division will also examine for compliance with new rules, the use of emerging technologies and the soundness of controls intended to protect investor information, records and assets.
– The Consumer Financial Protection Bureau (CFPB) finalized rules that will allow customers to transfer their bank data to another bank or allow third-party apps to access it without having to pay fees or clear other hurdles, the WSJ reported. The open banking rules follow through on a promise by President Biden to make it easier for customers to download their financial data and take that with them to another bank.
‘Too many Americans are stuck in financial products with lousy rates and service,’ CFPB director Rohit Chopra said. ‘Today’s action will give people more power to get better rates and service on bank accounts, credit cards and more.’
– Reuters reported that activist hedge fund firm Starboard Value's CEO Jeffrey Smith said Pfizer's board needs to hold management accountable for its underperformance, particularly for its record for producing profitable new drugs. ‘We measure success in producing blockbuster drugs and we all get measured by our track records. The track record here is not great,’ Smith said.
Starboard has built a $1 bn position in Pfizer but had not previously detailed its concerns about the company. Smith met with Pfizer CEO Albert Bourla days after the investor’s campaign at the company became public.
A Pfizer spokesperson declined to comment on Smith's presentation.
– Reuters also reported that, according to two people familiar with the matter, Legion Partners has built a stake in Five9 and is pressing for a board seat and cost cuts. Legion's involvement comes several months after, as Reuters reported in July, Anson Funds Management built a stake and began urging the company to consider a sale.
A representative for Five9 declined to comment.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
