AIG Settles with Activist Carl Icahn by @FortuneMagazine February 11, 2016, 6:30 PM EST E-mail Tweet Facebook Linkedin Share icons Score another victory for activists, sort of. On Thursday, American International Group aig agreed to give two board seats to hedge fund managers Carl Icahn and John Paulson, both of whom had called for the giant insurer to be split up. Paulson, who made billions betting against banks and mortgage bonds in the run up to the financial crisis, will join AIG’s board, along with Samuel Merksamer, who is a managing director of Icahn Capital. In a statement, Icahn, who has been waging a high profile fight with AIG for months, and was threatening to take the company to a proxy fight unless it agreed to a breakup, says he declined to join AIG’s board—implying that he was asked—because he is too busy. In their own statement AIG says, “John and Samuel will bring financial and business expertise to the Board, and we look forward to benefiting from their insights as we move forward with our strategy to create a leaner, more profitable and focused AIG.” Despite the addition of the two board members, the company has no plans to change its current strategy, according to a source familiar with the insurer’s agreement with Icahn. As victories go, it was a minor one for the activists, at least for now. While AIG is adding the two hedge funders, it is expanding its board, not replacing any directors so they will be two of 16 votes on the board. What’s more, AIG gets to avoid a costly and distracting proxy battle, and it will mostly stay together for the time being. And avoiding a distraction is something CEO Peter Hancock probably needs right now. On Thursday, AIG reported that had an after-tax operating loss $1.3 billion, or $1.10 a share, in the last three months of 2015. The company had earned $655 million is the same period a year ago. And analysts had been expecting the company to earn $0.91 a share, according to Bloomberg. Last month, AIG announced a plan that would spin off a portion of its mortgage insurance business into a separately traded public company. It also said it would return as much as $25 billion in capital to shareholders over the next two years. Hancock told Fortune at the time that he thought his plan was better than Icahn’s and that he hadn’t talked to the investor recently. Hancock has argued that AIG is better as a whole because of diversification. Icahn has argued that AIG would be better off split up in part because it would be able to avoid being labeled a systemically important financial institution—regulator speak for too-big-to-fail—which comes with added regulatory costs. In his statement, Icahn says he continues to believe that AIG would be better off “smaller and simpler” than it is now, and that he work to help the company shed its SIFI designation.