AT&T’s truce with Elliott Management — avoiding a protracted fight with one of the world’s most successful activist shareholders — sent the company’s stock to a 52-week high on Monday. The plan, as described by Elliott Management, includes “significantly enhanced operational efficiency with meaningful margin expansion, a “full review of the portfolio,” and “no more major acquisitions.” AT&T\n \n (T) CEO and Chairman Randall Stephenson heralded the resolution and said “I think our interests are 100% aligned. Seriously.” “I’ve always said, if you’re going to have an activist in your stock, you oughta get a really good one. And these guys are pretty good,” Stephenson said in a telephone interview with CNN Business. “So, they had some really good insights and thoughts.” “It was largely our plan” already, he said, but “they had some stuff that we looked at and said ‘We like that,’ and some communication thoughts in terms of how we brought this plan to bear in the market.” For example, Elliott Management said AT&T has agreed to separate the CEO and chairman roles once Stephenson steps down. Elliott had been pushing for that split after it took a 1% stake in AT&T in September and outlined demands for the company. But AT&T had a year ago decided to separate the CEO and chairman roles after Stephenson leaves the company, according to a company spokesperson. Stephenson has not indicated that he is ready to retire, but many investors have speculated the time may be getting near: He recently appointed WarnerMedia CEO John Stankey as the company’s president and chief operating officer, making him the heir apparent. (WarnerMedia is CNN’s parent company.) On Monday, AT&T said Stephenson will stay on through at least 2020. According to Elliott, AT&T also pledged not to make any more large acquisitions like WarnerMedia or DirecTV. Those deals cost tens of billions of dollars and made AT&T one of the world’s most highly leveraged companies. It is actively working to pay down its enormous debt load. Elliott added that AT&T has committed to “the addition of two new skilled directors.” This will happen when current directors retire: AT&T said two directors will retire in the next 18 months because of board age limits. The company “expects to add a new director at its next board meeting, followed by another director in 2020.” AT&T has been in discussions with various candidates for a while, and Elliott met with one prospect Friday. Elliott is enthusiastic about AT&T’s candidate, but the ultimate decision about both new director positions will be left to the board, according to an AT&T spokesperson. AT&T also agreed to meet certain profit targets, including earning $4.50 to $4.80 per share by 2022. That’s more than the $3.60 to $3.70 per share AT&T expects to earn next year. The company’s stock surged 5% to a little under $39 a share, hitting a 52-week high Monday. Elliott Management controls funds that own $3.4 billion worth of AT&T’s stock. When asked if these profit targets will mean higher product costs or employee cutbacks, Stephenson said, “This isn’t something where an activist has come in and we’re going to start starving the business to buy back stock. This is not that kind of thing. We’re going to invest heavily in HBO Max. We’re going to invest $20 billion in our core business next year.” WarnerMedia is holding an investor day to tout its plans for the HBO Max streaming service on Tuesday. In a statement on Monday, Elliot Management Partner Jesse Cohn and Associate Portfolio Manager Marc Steinberg commended AT&T for making “positive steps.” But AT&T did not agree to all of the demands that Elliott had made in September, including spinning off DirecTV, its Mexican wireless business, and several other operations. In its September letter to AT&T’s board, Elliott had demanded AT&T sell many of its non-core businesses that it said are “distractions and should not be part of the portfolio.” Elliott in September took issue with WarnerMedia’s leadership under Stankey, in particular. The firm said confusion over the media strategy remains, as does “a growing sense that AT&T doesn’t have a plan” — particularly with HBO Max. But Stephenson sounds very bullish about HBO Max, and said WarnerMedia has pulled off an “amazing feat” in the time since his acquisition of Time Warner (now called WarnerMedia) took effect last year. AT&T should focus more on its core wireless business, Elliott argued. The company has lost ground to Verizon\n \n (VZ), and tougher competition is likely coming if T-Mobile\n \n (TMUS) and Sprint\n \n (S) are ultimately successful in their attempt to merge. Elliott predicted in September that AT&T’s stock could potentially surge to above $60 a share by 2021 if the company improved operational efficiency, focused on its core brands and changed its leadership. Despite only making some progress on its demands, Elliott predicted Monday that AT&T’s changes would put the company “on the path” to $60 a share. The “mutual agreement,” as Stephenson described it, was announced on the same day that AT&T released its third quarter earnings. AT&T’s earnings The report was a mixed bag: Sales fell 2.5% and profit tumbled 21.6%. But excluding one-time costs, profit would have grown. The company reduced its net debt by another $3.6 billion last quarter, and it added 101,000 high-value customers who pay their wireless bills at the end of every billing cycle. But WarnerMedia had a tough quarter, with sales falling 4.4% because of some difficult comparisons to blockbuster movies that came out in the third quarter of 2018, including “Crazy Rich Asians.” And AT&T’s TV Now streaming television plan continued to bleed customers: It lost an additional 195,000 subscribers last quarter. But shareholders sent the company’s stock higher on AT&T’s strong forecast for 2020, including revenue growth between 1% and 2% and an adjusted profit margin of 2 percentage points above 2019’s margin. AT&T also announced a three-year plan in which it will retire 100% of the debt from the Time Warner deal. Elliott Management is run by billionaire investor Paul Singer. He is best known for battling Argentina over its multibillion dollar debt defaults. Elliot owns Italian soccer club AC Milan and it bought Barnes & Noble in June for about $683 million. Craig Moffett, of the research firm MoffettNathanson, said the plan “sounds good,” but expressed doubt about AT&T’s capability to get there. “Investors will be forgiven for skepticism about AT&T’s guidance that suggests everything is about to get better,” he wrote.