Ally Financial in Detroit reached a truce with Lion Point Capital, as it agreed to appoint an independent director in consultation with the activist investor.

In return, Lion Point agreed to drop its demand that Ally's board explore a potential sale or other strategic alternatives.

The $159 billion-asset Ally will select the new director with input from Lion Point, as well as from other major shareholders, according to a Monday news release. Ally did not identify which shareholders will be involved in the decision.

Ally will appoint the new director no later than June 30. The move will expand Ally's board to 12 members.

Additionally, Ally agreed to let shareholders who own at least 25% call a special meeting, and it will allow majority voting for uncontested director elections.

For its part, Lion Point agreed to drop its plan to nominate two directors, and to withdraw its shareholder proposal for the board to create a strategic alternatives committee. Lion Point owned about 4.4 million Ally shares as of Dec. 31. Lion Point had demanded in January that Ally explore strategic alternatives including a sale.

In a separate news release issued Monday, Lion Point commended Ally for agreeing to the new director appointment and for agreeing to make the corporate governance changes.

Ally's chairman, Franklin Hobbs, said in his company's news release, "We are frustrated with the market perception reflected in the price of Ally's stock and the current discount to book does not reflect the inherent value of this company."

Investors have also been frustrated with Ally, not just with its stock price but also other matters. Investors have complained that the company change how it pays executives, to align the interests of management more closely with shareholders. They also want Ally to either buy back stock or pay a dividend; however, both of those moves would require regulatory approval.

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