The Southwest board will undergo a major shakeup after the airline resolved a long running public feud with activist investor Elliot Investment Management.

Southwest Airlines Thursday reached an agreement with activist investor Elliot Investment Management to head off a proxy battle.

Kelly's retirement and Southwest's appointment of six new board members follow mounting pressure from hedge fund Elliot Investment Management.

Southwest Airlines struck a truce with Elliott Investment Management, giving the activist a significant presence on its board but not the majority control the hedge fund initially sought.The settlement announced Thursday deflects a potentially rancorous proxy fight and ends the acrimonious four-month battle over whether Southwest’s management is capable of pulling the airline out of a funk.

Southwest Airlines Co. has agreed to allow Elliott Investment Management to nominate five directors to its board, as the carrier seeks to address the activist’s push for changes and salvage the job of its chief executive officer.

The settlement deflects a potentially rancorous proxy fight.