CommonWealth REIT (NYSE:CWH) announced Monday that it will add three new independent trustees to make sure that independent trustees consist of at least 75 percent of the company board. The real estate investment firm will also change the way it calculates its management fees amid intense pressure from activist shareholders. Hedge fund Corvex Management and real estate developer Related Companies have been putting pressure on the company board for the past seven months to change its strategy.

CommonWealth REIT

CommonWealth ends the 7-month long battle

Corvex Management chief and former lieutenant Carl Icahn and Keith Meister argued that CommonWealth REIT (NYSE:CWH) excessively rewards its founder Barry Portnoy and his son Adam Portnoy, reports Michael Erman of Reuters. Mr. Meister and Related Companies’ head Jeff T. Blau were against the way the Portnoys are compensated and the way CommonWealth REIT (NYSE:CWH) is structured.

On Monday, CommonWealth REIT (NYSE:CWH) decided to end the battle by announcing shareholder-friendly policies. CommonWealth REIT (NYSE:CWH) president Adam Portnoy said that he had extensive interaction with the company’s shareholders over the past few months. The company board has decided to address the majority of shareholder issues. The battle began in February this year when Corvex teamed up with Related Companies to acquire a 9.8 percent stake in CommonWealth REIT (NYSE:CWH). Corvex delivered a 61-page presentation on the poor management, unenthusiastic board and weaker performance compared to other real estate investment trusts. At one point, Mr. Meister offered to acquire CommonWealth REIT (NYSE:CWH) for $27 per share.

CommonWealth founding family’s compensation down

The Portnoys finally agreed that the base management fees will be tied to the REIT’s market value instead of the size of its assets. They also agreed that 10 percent of the annual management fees will be paid to Reit Management & Research LLC in stock starting next year. Reit Management & Research LLC is a firm owned by the Portnoys.

The Newton, Massachusetts-based company said that it will also remove its “poison pill” provision. Based on the updated compensation model, the Portnoys would have been paid $8 million less in fees last year, estimates David Gelles of The New York Times. However, Adam Portnoy remains optimistic. He said that if the company stock responds positively to the changes, the founding family will more than make up for it.

CommonWealth REIT (NYSE:CWH) shares jumped 2.26% to $23.05 at 9:57 AM EDT.