Apparently the BoD of UK investment firm Alliance Trust decided discretion was the better part of valor as they announced a compromise with activist shareholder group Elliott Advisors on Tuesday. Alliance said it has agreed to appoint two of the three new board members that Elliott was requesting.

Alliance Trust

In return for adding former investment bankers Anthony Brooke and Rory Macnamara to the board, the activist investment firm agreed to drop its nomination of a third director, and said it would support the Alliance board on all other resolutions at the upcoming AGM.

This compromise ends a bitter fight between the parties, and avoids a showdown at Alliance’s annual general meeting on Wednesday.

Details on the Alliance Trust – Elliott deal

The deal also specifies that the hedge fund will not call a general meeting “or seek to agitate against the company, its board or management publicly until after the company’s 2016 AGM at the earliest”.

Of note, Elliott owns a 12% stake in Alliance Trust, and claimed a new approach was required as the firm has performed worse than other investment trusts for several years now. Elliott was also critical of the compensation of Alliance’s CEO, Katherine Garrett-Cox, a well-known Londoner. She was paid £1.34 (over $2 million) last year.

However, despite the deal, Elliott apparently plans to keep up the pressure on Alliance management. The firm’s statement on Tuesday noted: “We are pleased to have reached an understanding with Alliance Trust and look forward to following the enlarged board’s progress on strategic and business matters over the next year and beyond.”

Statement from Alliance Trust

Alliance BoD Chair Karin Forseke said in a prepared statement: “On behalf of the whole board, I would like to express my gratitude to our shareholders for engaging with us on this important issue. Having considered this feedback we have worked with Elliott to find a compromise which we believe is in the best interests of all our shareholders.

“I would also like to welcome Anthony and Rory to the board where their significant experience will be a considerable asset.”