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Ackman Shot Down at Target Meeting (Updated)

Bill Ackman loses his proxy battle with Target.

Updated from 9:56 a.m. EDT

In the battle between


(TGT) - Get Target Corporation Report

and Bill Ackman, the discounter came out on top.

Shareholders snubbed the hedge-fund manager at the company's annual meeting on Thursday, opting to put all four of Target's incumbent nominees back onto the board rather than electing Ackman and his five dissidents. A proposal to set the board size at 12 also passed, according to a preliminary vote count.

Shares of Target fell 1.4% to $39.04 after the announcement.

"On behalf of Target's Board of Directors and management team, we thank our shareholders for their overwhelming support throughout this process," Gregg Steinhafel, chairman, president and CEO said in a statement. "Today's outcome demonstrates the confidence Target shareholders have in our board's qualifications, diversity and experience to provide effective and independent oversight and direction to the company, contributing to the creation of one of the most recognized brands in the United States."

Now the question remains: will Ackman, who owns a 7.8% stake in the company through his Pershing Square Capital Management hedge fund, continue to invest in Target?

Earlier this week, he essentially attempted to bribe shareholders into giving him a spot on the board by saying he would

retain his stake,

now worth over $55 million, for at least five years if he was elected.

Ackman attempted to push two of Target's board members -- Solomon Trujillo and Anne Mulcahy -- to resign, as a result of the fact that their employment status had changed.

Target's guidelines call for a board member to step down when his or her employment situation "changes substantially," at which point the board can decide whether to accept the resignation. Trujillo was removed from Telstra on May 14, while Mulcahy retired from

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as CEO last week.

Ackman also wanted to shrink the board size.

His reasoning? He wanted executives to make more drastic changes to the company to pass off big gains to shareholders.

Shares of the company have fallen more than 30% since April of 2007, when Ackman began investing in the company. During that same period, shares of

Wal-Mart Stores

(WMT) - Get Walmart Inc. Report

grew 5%.

Still, Ackman has had success in previous board battles. In 2006, he helped convince Wendy's/Arby's

(WEN) - Get Wendy's Company Report

to sell off its doughnut and coffee chain, which ultimately proved profitable.

In 2007 he tried to oust the entire board of Ceridian, a payroll company, and replace it with a new members. He failed on a complete rejiggering of that board, and the company was later sold.

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