NEW YORK (AP) — Avon agreed to make changes to its board Monday in order to avoid a proxy fight with some of its shareholders who collectively own more than a 3 percent stake in the company.
Shares of the beauty products company soared Monday afternoon.
Under the terms of the agreement, Avon will allow an investor group led by Barington Capital Group to approve an independent board member. In exchange, the group agreed to withdraw its nominations for the board and will vote for the company's nominees.
Avon announced separately Monday that it named former FedEx Corp. executive Cathy Ross to its board. Ross was the chief financial officer of FedEx's express shipping business until 2014, when she retired.
Avon, which has struggled with falling sales, recently announced plans to sell a majority stake in its North America business to private investment firm Cerberus Capital Management. Cerberus also bought a stake in the parent company. Last week, Avon said it would cut 2,500 jobs and move its headquarters from New York to Great Britain.
James A. Mitarotonda, chairman and chief executive of Barington, said that he was pleased with the agreement. "We spent time with Avon's management team and members of the board discussing our strategic and operational suggestions, and we are confident that Avon is taking the necessary actions to improve the long-term performance of the company," he said in a statement.
Shares of Avon Products Inc. rose 32 cents, or 7.5 percent, to $4.60 in afternoon trading Monday.