William Ruprecht, chairman and chief executive of Sotheby's, will leave the company by "mutual agreement," according to the auction house. The announcement on Thursday comes a year after activist investor Daniel Loeb launched an aggresive campaign to chart a new course for Sotheby's which he saw as lagging behind its full potential.

Sotheby's waged a bitter battle with the billionaire hedge fund manager. But in the spring, Loeb and two allies won two more board seats and began to influence management.

Loeb particularly fought for Sotheby's to improve its balance sheet, fast foward its strategy to lure new millionaires in growing markets such as China, and to forge ahead on the Internet. In July, Sotheby's announced a partnership with eBay which has 150 million customers.

Ruprecht, who began at Sotheby's in 1980 and rose to chief in 2000, will stay on while a search for a new head is conducted.

Sotheby's stock rose 7 percent after hours on Thursday following the announcement.