But the oil driller said Friday that its stockholders decided against the billionaire investor's proposal for a $4 dividend.
Under intense pressure from Icahn, J. Michael Talbert had already said that he would retire as chairman by November. He had been Transocean's CEO from 1994 to 2002 and served three terms as chairman before Friday's ouster.
Icahn, who holds a 5.6 percent stake in Transocean, was seeking several changes. He had nominated three board nominees and pushed for an annual $4 dividend. He had said that Transocean must replace the board members that helped create its "failed capital allocation strategy," including Talbert.
Transocean, based in Switzerland, owned the Deepwater Horizon drilling rig which exploded and sank in the Gulf of Mexico in 2010, triggering a massive offshore oil spill. The company agreed to a $1.4 billion settlement with the Justice Department for its role in the disaster.
It has posted losses for the past two years.
Samuel Merksamer was the Icahn nominee to win a seat on the board. The other four people elected Friday were company nominees.
Shareholders approved the company's annual dividend proposal of $2.24.
Icahn said in a statement Friday that he was pleased with the shareholder support for Merksamer.
Icahn, known for shaking up companies in which he invests, is in the midst of trying to block a sale of Dell Inc.
Transocean shares fell 70 cents, or 1.3 percent, to close at $54.03.