(Reuters) - U.S. cosmetics maker Avon Products Inc (AVP.N) has reached an agreement with Barington Capital to nominate the investor’s chief executive officer, James Mitarotonda, to its board in exchange for avoiding a proxy contest, a filing on Monday showed.
Investors Shah Capital, Barington Capital Group and NuOrion Partners had pressured the cosmetics maker to explore strategic options, including a sale. The trio together hold a 3.4 percent stake in the company.
Mitarotonda, who runs Barington Capital, will join Avon’s board, the company said in a regulatory filing.
The settlement comes just 10 days after the New York-based investment firm notified the company it planned to nominate its own directors to the board.
In exchange for the board seat, the parties agree to not run the proxy contest and to support management’s directors, the filing said.
Barington first publicly disclosed its stake in Avon in December 2015.
Since then the firm has been increasingly vocal about its frustrations, which include deteriorating operating performance.
Last year, Avon’s then-CEO, Sheri McCoy, said she would step down in March 2018 after activist investor Barington pressured the company for her removal. In February, Avon named former Unilever NV UNc.AS executive Jan Zijderveld to lead the company.
Barington Capital and Avon were not immediately available for comment.
Barington and the other activists had become increasingly frustrated with the long process of finding a new CEO and had been pushing the company to consider a sale. While they were pleased with Zijderveld’s appointment, they continued to lobby for operational changes and board changes.
Avon’s shares were trading nearly 3 percent higher in after-market trade on Monday.
Reporting by Nivedita Balu in Bengaluru and Svea Herbst-Bayliss in Boston; Editing by Matthew Lewis