Southwest Airlines Chief Executive Gary Kelly purchased $1 million worth of company stock this week as four unions at the Dallas-based carrier called for his resignation.
Kelly bought the shares Tuesday in several transactions ranging in price from $35.60 per share to $35.585 per share, according to a filing made with the Securities and Exchange Commission. The shares were purchased by his family trust.
The transaction brings Kelly’s holding to 505,119 shares of Southwest valued at $18.3 million. Shares of Southwest (ticker: LUV) closed up 54 cents at $36.42 on Thursday.
“I really believe in our people and in their ability to keep us successful,” Kelly said about the stock purchase.
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Earlier this week, the Southwest Airlines Pilots’ Association said its board voted 20-0 expressing “no confidence” in Kelly, suggesting that the CEO be replaced two weeks after the airline suffered a computer outage that led to thousands of canceled flights and stranded passengers.
Three other unions quickly joined the pilots in calling for Kelly’s departure.
“Gone are the days of Herb Kelleher and Colleen Barrett who built a company that believed in taking care of their employees first,” said Transport Workers Union 555 President Greg Puriski, who represents baggage handlers and ground crew at Southwest. “Those days have been, sadly, replaced by a focus on the bottom line.”
In a research note, Wolfe Research analyst Hunter Keay told investors that Kelly’s $1 million purchase is the first time the CEO has bought stock on the open market since he became an officer at Southwest.
“This purchase probably is, on some level, a response to those calls for his ouster,” Keay wrote. “But regardless of the motivation, money is money. The purchase should be taken as a sign of confidence that (1) [Southwest’s] CEO believes in the long-term story, and (2) that he probably isn’t retiring anytime soon.”