(Bloomberg) -- Occidental Petroleum Corp. agreed to a truce with activist investor Carl Icahn that will see three new directors appointed to the oil producer’s board and avoid a proxy battle as the company navigates the worst industry downturn in decades.

As part of the deal, two Icahn associates, Andrew Langham and Nicholas Graziano, will join the board, according to a statement Wednesday. Herbalife Nutrition Ltd. board member Margarita Palau-Hernandez will also get a seat. The deal comes on the same day that Occidental said it will further cut capital spending and reduce executive salaries, scaling back as the coronavirus outbreak and a battle for oil market share pummel crude prices.

The Houston-based company previously announced that former Chief Executive Officer Stephen Chazen had been appointed chairman, and earlier this month slashed its dividend. Occidental rose 3.5% to $11.09 a share at 9:39 a.m. in New York.

Icahn reported earlier in March that he’d raised his stake in Occidental to nearly 10%, increasing pressure on the company to make changes after its stock fell about 75% since the start of the year amid a rout in the oil sector and the broader markets. Icahn has been particularly critical of CEO Vicki Hollub and Occidental over its $37 billion takeover of Anadarko Petroleum Corp. last year and the $10 billion in pricey financing it took from Warren Buffett for the transaction.

Occidental will lower 2020 capital spending almost 50% to between $2.7 billion and $2.9 billion from the company’s original guidance of $5.2 billion to $5.4 billion, according to a separate statement. The company will also reduce operating and corporate costs this year by at least $600 million.

“We are making solid progress with additional cost reductions to help withstand the low commodity price environment and other macroeconomic pressures impacting our industry and the global economy,” Hollub said in the statement. “We will continue to take actions as necessary to further strengthen our balance sheet and ensure the long-term viability of our business.”

Some employees will have their pay reduced by 30% while Hollub’s salary will be reduced 81%, according to people familiar with the matter.

(Updates shares in third paragraph)

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