Disney investors reelect board, reject rights plan

NEW ORLEANS (Reuters) - Shareholders of the Walt Disney Co. (DIS.N) resoundingly reelected the 11-member board but did not pass a "poison pill" proposal on Thursday at the entertainment company's annual meeting in New Orleans.

Investors also voted down a shareholder proposal to strengthen precautions against unsolicited takeover threats, or so-called "greenmail." The company has adopted some of the measures on its own over the past three years, according to Disney board Chairman John Pepper.

A shareholder proposal that would require the board to adopt a "poison pill" to foil hostile takeovers received yes votes from a majority of those who voted but just 43 percent of the shares outstanding -- short of the two-thirds it needed to pass.

The board had recommended that shareholders reject the plan as lacking in flexibility, but Pepper said directors would give "prompt and serious consideration to the matter."

The proposal would have required the board and shareholders to ratify the adoption of a poison pill every year.

Disney has not had a poison pill, also known as a stockholders rights plan, since 1999 and was not considering adopting such a plan, the company's proxy statement said.

Also on Thursday, Disney investors approved an amended version of the company's 2005 stock incentive plan, which increases the number of shares that can be issued by 31 million to 58 million. They also reauthorized a 2002 executive performance plan, which needs approval every five years.

An estimated 400 shareholders attended the meeting at the Ernest N. Morial Convention Center in New Orleans.

Disney Chief Executive Robert Iger chose the location, saying he wanted to show the company's support for the city as it recovers from the damage suffered in Hurricane Katrina.