(Reuters) - Transocean Ltd said on Monday that Chairman Michael Talbert will step down later this year, in a move that comes just days before the culmination of a fight between the offshore driller and investor Carl Icahn in which Talbert was a target.

Talbert, a director since 1994 who was also chief executive from 1994 to 2002, told the board that if re-elected at the upcoming shareholder meeting on May 17, he will step down as chairman by November and leave the board no later than the 2014 annual meeting, Transocean said.

Icahn, who owns 5.6 percent of Transocean, has opposed Talbert's re-election. The activist investor has been campaigning for a higher dividend payout for months and is calling for major changes to the Switzerland-based company's board ahead of the annual meeting.

Talbert's exit strategy caps a tumultuous meeting season for long-serving bosses in the energy business. On Friday, John Hess was stripped of his chairman duties at Hess Corp , just a week after Occidental Petroleum Corp Chairman Ray Irani was voted out after two decades at the top.

Icahn has gone after Transocean over "ill-advised" mergers and "unsuccessful" development strategies. Over the past five years, its shares dramatically underperformed rivals Ensco Plc and Noble Corp - even before the 2010 Gulf of Mexico oil spill following a deadly Transocean rig accident.

Transocean grew out of a series of mergers that started with the purchase by Alabama-based Sonat Offshore Drilling of Norway's Transocean ASA in 1996. Three years later came the takeover of Sedco Forex, spun off by oil services giant Schlumberger , before a blockbuster deal with GlobalSantaFe in 2007 created the current industry leader.

Icahn wants the company to replace three directors, including the chairman, with his nominees John Lipinski, José Maria Alapont and Samuel Merksamer.

Transocean has responded by questioning their qualifications, saying Alapont and Merksamer have no apparent energy experience while Lipinski leads a U.S. refiner - a side of the oil business far removed from exploration.

Transocean also notes that Icahn, in his successful battle to take over the board of refiner CVR Energy Inc last year, had criticized Lipinski's track record, and that shareholder advisory firm ISS did not back him for Transocean's board - even though it approves of Merksamer and Alapont.

Apart from Talbert, the two directors in Icahn's sights are Thomas Cason and Robert Sprague. Cason had been a GlobalSantaFe director, and previously worked at oilfield services company Baker Hughes Inc . Sprague has been a director since 2004 after a long career at Royal Dutch Shell Plc .

Icahn has said he holds the directors responsible for the value destruction brought about by the takeovers of old assets while rival Seadrill was investing in new rigs.

Transocean is in the process of shaping up its sprawling global operations. It has promised to cut $300 million of costs by next year, on top of planned reductions of about the same this year from the 2012 operating and maintenance cost figure of $6.1 billion.

Shares of Transocean were down more than 1 percent at $53.94 on Monday. The stock has declined by 65 percent in the past five years, compared with a 33-percent drop for Noble and an 8-percent slide for Ensco. Seadrill is up 38 percent in that time.

(Reporting by Braden Reddall in San Francisco and Sakthi Prasad in Bangalore; Editing by Matt Driskill and Marguerita Choy)

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