NEW YORK (The Deal) -- Carl Icahn on Thursday backed away from his proxy battle with eBay (EBAY), dropping his proposal that the company split off its PayPal unit and withdrawing two nominees from the company's board.
The two sides in a statement said that eBay has agreed to Icahn's suggestion to appoint one-time AT&T (T) CEO David Dorman to its board. Dorman, a founding partner of Centerview Capital Technology and chairman of CVS Caremark Corp (CVS), worked with Icahn as lead independent director at Motorola Solutions (MSI).
EBay CEO John Donahoe, a target of stinging criticisms from Icahn in recent months, in a statement said, "we are very pleased to have reached this agreement" and return focus to running the company.
"As a result of our conversations, it became clear that Carl and I strongly agree on the potential of PayPal and our company," Donahoe said. "I respect Carl's willingness to work together to drive sustainable shareholder value today and into the future. His record shows that he has done this with many other companies in the past."
Icahn, owner of about 2% of the company's shares, in January called for eBay to split off PayPal, and in a series of letters accused eBay directors Marc L. Andreessen and Scott Cook of conflicts. The activist said that corporate governance at eBay was among the worst he had seen and that Donahoe was not up to the task of being CEO of the company.