Southwest Chair Kelly to step down next year amid Elliott fight [Video]

Southwest Airlines said Tuesday that executive chairman and former CEO Gary Kelly will retire next year and announced a board shake-up, moves that come as the carrier faces pressure for changes by activist investor Elliott Investment Management.

“Now is the time for change. It’s time to shake things up, not just stir them a bit,” Kelly said in a letter to shareholders. “The wisdom comes in knowing what to change and what not to change.”

Kelly, 69, who has worked at Southwest for nearly four decades and has been chairman since the carrier’s co-founder, Herb Kelleher, retired in 2008, announced he would step down after the company’s annual shareholder meeting next spring. The announcement came after a meeting with Elliott, which has been calling for leadership changes at the Dallas-based carrier.

Elliott in June revealed a nearly $2 billion stakein Southwest, seeking to oust leadership, including CEO Bob Jordan, 63, who has also spent almost four decades at the carrier …