N.Y. Times quells row with investor

New York Times Co. defused a standoff Monday with its largest outside shareholder, Harbinger Capital, by agreeing to support two people nominated by the hedge fund as directors at its annual meeting next month.

Harbinger had accumulated a 19% stake in the company in recent weeks, rivaling the amount held by the Sulzberger family. The Sulzbergers still control the company through a special class of shares that allow them to name 70% of the board.

The Times will expand its board from 13 to 15 to accommodate the new nominees, one of whom is Scott Galloway, a New York University marketing professor and shareholder activist who has been advising Harbinger.

The agreement calls for Harbinger to halt its campaign to have its own slate of four directors elected by shareholders. In addition to Galloway, the Times has also agreed to support James Kohlberg, co-founder of investment firm Kohlberg & Co., as a director.

Harbinger and Galloway have argued that the Times needs to take drastic action to shed assets outside of its core newspaper and invest aggressively in building up its online businesses.

Times executives told investors at a recent conference that the company was always reevaluating its portfolio of assets and moving quickly to expand readership and revenue on the Internet.