CarMax Inc. will add two new members to its board of directors following discussions with activist investor Starboard Value, the used-car retailer announced.

The board expansion comes after Starboard urged CarMax's new chief executive officer, Keith Barr, to implement several operational changes to improve the company's performance. The activist investor has pushed for revamping the company's pricing framework, streamlining digital processes, and reducing costs.

Barr recently assumed the CEO role at CarMax, taking over leadership of the nation's largest used-car retailer during a challenging period for the automotive retail sector. The company has faced pressure from investors to improve its operational efficiency and adapt to changing market conditions.

Starboard Value, known for its activist approach with retail and consumer companies, has been engaging with CarMax management on strategic initiatives. The addition of board members represents a compromise that allows the activist investor to have greater input on corporate governance without a contentious proxy fight.

The agreement reflects ongoing investor scrutiny of CarMax's business model and operations as the used-car market faces headwinds from higher interest rates and changing consumer purchasing patterns. The new board members are expected to bring additional expertise to guide the company's strategic direction under Barr's leadership.