Updated from 3:13 p.m. EDT

Frustrated by the lackluster performance of shares of Sun Microsystems ( SUNW), investors on Thursday called for reforms at the Santa Clara, Calif., company. But despite the proxy-based protest, it's unclear whether Sun will take the matter to heart.

Gathered at Sun's headquarters for its annual shareholder meeting, investors overwhelmingly approved a measure to do away with the company's poison-pill provisions, and showed strong support for a measure to tie senior management's compensation to performance targets.

In a preliminary vote tally, Sun reported that 84% of voters endorsed a proposal to give shareholders a greater say in the company's poison-pill provision, which is a method of fending off an unwanted takeover by instantly creating shares, thus driving up the acquisition price.

The poison-pill proposal, submitted by William Steiner, an individual shareholder, calls for Sun to eliminate the provision or put it up to a shareholder vote.

A second shareholder initiative, calling for linking senior executives' stock option grants to performance metrics, garnered 42.8% of the vote.

A Sun spokesperson said the company's board will take the results of the poison-pill vote into account as it strives to maximize shareholder value. And Sun will continue to review all aspects of executive compensation to ensure that it is appropriately linked to performance and competitive market level, the spokesperson said.

According to Teresa Johnson, a partner at San Francisco law firm Howard Rice Nemerovski Canday Falk & Rabkin, companies face a tough choice when shareholders rock the vote, as occurred with Sun's poison-pill provision. "It can be a difficult position for the company, because that is clearly a very strong message from the shareholders about their views," said Johnson. But she noted that changes to poison pills are "huge decisions," requiring the board to consider numerous factors in addition to shareholder desire.

Sun is among many tech companies, including Apple ( AAPL)and Dell ( DELL), that have faced similar shareholder initiatives in recent years. But given that shareholder proposals are nonbinding, they're often nothing more than strongly worded messages.

Front and center in Sun's shareholder campaigns was CEO Scott McNealy's compensation. Institutional Shareholder Services, a Rockville, Md.-based proxy voting services firm, asked shareholders to withhold their votes to reappoint Sun's compensation committee members for awarding McNealy a $1.1 million discretionary cash bonus in fiscal 2005, despite the company not hitting many of its targets.

According to ISS, Sun's stock has posted returns of negative 13.86% for the year compared with average growth of 16.28% of its peer group. Over the last three years, Sun stock returned a negative 9.37% to shareholders compared with growth of 16.56% average among its peers.

Sun's directors were reappointed at the meeting, garnering 76% of shareholder votes.

The proposal to make stock option grants performance-based, which was advanced by the Service Employees International Union, also focused on McNealy's compensation. According to the proposal, McNealy was awarded options to buy 7.5 million shares between 2001 and 2004. "Such grants can result in substantial compensation for only modest gains in share price," the proposal stated. If Sun's stock price appreciates by only a dollar share, it explained, McNealy would reap more than $7.5 million, "even if Sun Microsystems underperformed its competitors during that period."

Instead, the measure proposed that a significant portion of senior executives' future options be tied to performance, by linking the exercise price to an industry index and making vesting contingent upon meeting certain targets.

While the proposal fell short of a majority vote, SEIU Director of Public Markets Steven Weingarten said it still sent a message to Sun. "We think it's a very strong sign to Sun Micro that their rewarding of executives while shareholders take a cold bath is wrong," said Weingarten.

Shortly before the meeting got underway, Sun announced that Chief Financial Officer Stephen McGowan will retire at the end of the company's fiscal year in June. The company said it will begin an immediate search for a replacement.

Shares of Sun were recently off 3 cents to $3.87.