SAN JOSE, Calif. (AP) — Ebay and billionaire activist investor Carl Icahn have settled their proxy fight ahead of the company's annual meeting.
Icahn and eBay had been in an acrimonious tussle over PayPal, the e-commerce company's quickly growing mobile payment arm. Icahn, who owns about 2 percent of eBay's shares, said repeatedly the company should spin off all or part of PayPal, while eBay has said the company is better as a whole. Icahn has also criticized the company's directors including CEO John Donahoe.
But under a deal announced Thursday, Icahn said he is dropping the PayPal strategy and withdrawing his proposal to put two nominees on the board.
In return, eBay will make David Dorman an independent director, the 10th independent on the 12-member board. The 60-year-old Dorman is chairman of CVS Caremark Corp. and founding partner of Centerview Capital Technology.
Icahn said he still believes eBay should spin off PayPal and said in a statement that he'll seek confidential talks with the company, whose leadership Icahn has labeled as "either incompetent or negligent."
But in an interview with CNBC on Thursday, Icahn had mostly praise for Donahoe.
"I really do believe John wants what's good for the company," he said. "I've learned as an investor if you want to make money you have to be flexible," he added.
Still, he reiterated his belief that PayPal should be separated.
"I believe they should be separated maybe sooner than John believes it... I think John eventually will want to do that, but he has not said that," he said.