Gary Kelly Has Had Enough

The former Southwest CEO is giving up his role as executive chairman. Will that save Bob Jordan's job?

Dear readers,

When I was a sports reporter years ago, I observed something interesting that would occasionally happen after a team had a very successful season: the leadership of those teams — coaches and general managers — might choose that moment to retire or take jobs elsewhere. No one ever admitted it, but I wondered if they realized their teams had peaked and the future might not look as bright as the past.

I've been reminded of that twice in Gary Kelly's career. I wondered about it first in June 2021 when Kelly announced he would retire as Southwest’s CEO, just as the industry grappled with a massive problem of rebuilding itself after the worst economic disaster in aviation history. And I considered it again on Tuesday when Kelly said he will leave as executive chairman early next year, a job that provided him a remarkable $9 million last year in total compensation. Kelly will be gone by spring.

I know activist investor Elliott Management wanted Kelly out, so his departure from the board makes sense. But Kelly was a Southwest lifer (one of many at that company — and probably too many), who had great success for a long time. If there's anyone who could hang on, he might have been the guy. Still, I wasn’t surprised that Kelly opted to leave, and I wonder if he may have settled on some version of I don't need this shit.¹ Southwest is struggling, and Kelly has a lot of money. As my favorite cliché goes, the juice probably is no longer worth the squeeze.

I think Kelly leaves behind a more complicated legacy than he might have hoped.