Hertz announced Thursday that it had agreed to accept three of activist shareholder Carl Icahn's nominees on the rental car company's board, two of whom will help pick a new chief executive.
Under the deal, Icahn, a veteran of shareholder campaigns, agreed to not to run a proxy contest for control at the company's 2015 annual meeting, Hertz said.
"This agreement eliminates distraction and ensures that we stay sharply focused on delivering the significant potential of the business," said Linda Fayne Levinson, independent non-executive chair of the Hertz board.
The announcement comes three days after Hertz said that chairman and chief executive Mark Frissora had stepped down "for personal reasons."
Icahn in August disclosed that he had taken an 8.5 percent stake in Hertz, shares of which have slumped since announcing in June that it would restate its financial results for 2011, 2012 and 2013 after finding accounting mistakes.
Icahn said in August that he planned talks with Hertz management "relating to shareholder value, accounting issues, operational failures,underperformance relative to its peers and (my) lack of confidence in management."
The three nominees are Vincent Intrieri, Samuel Merksamer and Daniel Ninivaggi. All are veteran employees of Icahn ventures.
"Since I believe that the most important person at a company is the CEO, I'm especially happy that two of our three nominees will be on the five-person committee to find a permanent CEO," Icahn said in a statement released by the car-rental giant.
Hertz shares rose 4.5 percent to $29 in after-hours trade.