In this paper, a novel compensator based on Magnetically Controlled Reactor with Fixed Capacitor banks (FC-MCR) is introduced and then power system stability in presence of this compensator has been studied using intelligent control method. The problem of robust FC-MCR based damping controller design is formulated as a multi-objective optimization problem. The multi-objective problem is concoctedto optimize a composite set of two eigenvalue-based objective functions comprising the desired damping factor, and the desired damping ratio of the lightly damped and undamped electromechanical modes.The controller is automatically tuned with optimization of an eigenvalue based multi-objective function by ICAto simultaneously shift the lightly damped and undamped electromechanical modes to a prescribed zone in the s-plane so that the relative stability is guaranteed and the time domain specifications concurrently secured. The effectiveness of the proposed controller is demonstrated through eigenvalue analysis, nonlinear time simulation studies and some performance indices to damp low frequency oscillations under different operating conditions. The results show that the tuned ICA based FC-MCR controller which is designed by using the proposed multi-objective function has an outstanding capability in damping power system low frequency oscillations and significantly improves the power systems dynamic stability.