(Reuters) - Trian Fund Management LP will not challenge PPG Industries Inc's PPG.N board of directors at its 2019 shareholder meeting after the U.S. paints and coatings company met some of the activist hedge fund's demands and announced new financial targets, people familiar with the matter said on Thursday.

FILE PHOTO: Nelson Peltz founding partner of Trian Fund Management LP. speak at the WSJD Live conference in Laguna Beach, California October 25, 2016. REUTERS/Mike Blake

Trian, run by billionaire Nelson Peltz, asked PPG last October to replace its Chief Executive Michael McGarry with former CEO Chuck Bunch, look at how it uses its balance sheet, explore a break-up of the company, and eliminate the company’s practice of re-electing only a portion of its board instead of its entirety every year.

PPG unveiled financial targets for 2019 on Thursday and said it would explore separating its architectural from its industrial coatings, as well as destagger its board and remove super majority voting.

The company said on Thursday that the U.S. Attorney’s office for the Western District of Pennsylvania is also looking into improper accounting practices from 2017 into which the U.S Securities and Exchange Commission opened a probe in June.

PPG on a conference call with analysts said it was fully cooperating with the SEC and the U.S. Attorney’s office on the investigation.

Trian will not submit its own nominees to challenge PPG’s board of directors at the company’s upcoming shareholder meeting, the sources said. The deadline for nominations is at the end of this week.

“Over the last several months, PPG has actively engaged with many of our shareholders. The targets and objectives announced today resulted from PPG’s planning process, are responsive to a broad set of shareholder feedback and demonstrate confidence in the Company’s long-term prospects and operational excellence,” McGarry said in a statement.

A PPG spokesman declined to comment on Trian’s plans. Trian also declined to comment.

Among the 2019 targets PPG announced were sales growth of 3 to 5 percent and a minimum 10 percent earnings-per-share growth as the standard for executive incentive compensation.

PPG shares were trading up 4 percent at $106.58 in afternoon trading in New York on Thursday, giving the company a market capitalization of more than $25 billion.

Trian's investment in PPG last year came after the Pittsburgh-based company was hit by several missteps. It acknowledged accounting irregularities that caused it to restate its earnings. In 2017, PPG made a $30 billion hostile bid for Dutch peer Akzo Nobel SA AKZO.AS, which ended unsuccessfully.

Trian's largest investments are General Electric Co GE.N and Procter & Gamble PG.N, where the hedge fund has board seats.