(Reuters) -Shake Shack Inc on Tuesday added an independent director in agreement with Engaged Capital LLC, avoiding a potential proxy battle between the activist investor and the restaurant chain.

This follows a Wall Street Journal report that said Engaged Capital, which according to Refinitiv data has a 4.36% stake, was planning to launch a proxy fight for three board seats.

The shareholder activist had determined ways to double the company's profitability within two years and believes the chain should get rid of its staggered board, meaning not all directors are up for election at the same time, according to the report.

But Shake Shack said on Tuesday that Engaged Capital would support the board's full slate of directors at the 2023 annual meeting of stockholders.

The company has named Jeffrey Lawrence, former finance chief at apparel retailer FIGS Inc and Domino's Pizza Inc, as an independent director.

It has also mutually agreed with Engaged Capital to add another director with restaurant operations experience.

"Jeff and an additional director with expertise successfully scaling profitable restaurant concepts will be tremendous additions to the board," Glenn Welling, founder and chief investment officer at Engaged Capital, said in the release.

Engaged Capital did not immediately respond to Reuters request for additional comments.

Last year, Coupons.com-owner Quotient Technology Inc had appointed the activist investor's nominee to its board, putting an end to a tussle. However, in March 2023, Quotient was reportedly exploring options including a sale of the company.

In May, Shake Shack posted a smaller-than-expected first-quarter loss, benefiting from higher prices for its menu items that offset pressures from rising prices of beef and other cost pressures.

(Reporting by Granth Vanaik in Bengaluru; Editing by Shilpi Majumdar)