Four months after joining Ingersoll-Rand's board of directors, Nelson Peltz has decided to compromise with the company.
The Trian Fund Management chief has agreed to drop his call for Ingersoll to be split into three companies in exchange for a spin-off of its security-technology business. In addition, Ingersoll has agreed to launch a $2 billion share-buyback program and to boost its dividend by 31%.
The spin-off will be completed in about a year, Ingersoll said.
"The spin-off plan, the substantial dividend increase and the return of additional capital to shareholders should crystallize value at Ingersoll-Rand," Trian, which owns 7% of the company, said.
Ingersoll gave Peltz a board seat in August to avoid a proxy fight and launched the strategic review that produced the spin-off plan.