At the company’s annual shareholders’ meeting Wednesday in Prescott, Arizona, executives of Sturm, Ruger & Co. Inc. (NYSE: RGR) announced that a shareholder proposal requiring a “report on the Company’s activities related to safety measures and mitigation of harm associated with Company products,” won shareholder approval.
In its proxy statement released in March, the company had recommended that shareholders vote against the proposal.
A shareholder group led by the Sisters of the Holy Names of Jesus and Mary filed the proxy proposal and in a press release from the Interfaith Center on Corporate Responsibility, the order’s Sister Judy Byron said:
We believe the board has a responsibility to implement policies and practices that will safeguard the lives of its customers and, more broadly, society. Too many lives have been lost to gun violence for the manufacturers of these products to wash their hands of their responsibility in these events.
Following the announcement of the vote, Ruger CEO Christopher Killoy said now that shareholders have spoken the company will follow through. However, he said, that the proposal will not change what “we stand for.”
As presented in the proxy statement, the shareholders are seeking the following information:
- Evidence of monitoring of violent events associated with products produced by the company.
- Efforts underway to research and produce safer guns and gun products.
- Assessment of the corporate reputational and financial risks related to gun violence in the U.S.
BlackRock Inc. (NYSE: BLK), which owns a stake of nearly 17% in Ruger, has taken steps to require more accountability on gun sales from firms it invests in and last month announced the creation of several funds that do not include either gunmakers or large retailers who sell guns.
It is not known yet how BlackRock voted its shares on the shareholder proposal or how Vanguard, which owns a 9.5% stake in Ruger, voted its shares. Institutional Investor Services had recommended a vote in favor of the shareholder proposal saying that it would provide additional evidence that Ruger is correctly assessing risk on its long-term prospects.
All nine candidates standing for reelection to Ruger’s board were approved even though there had been a campaign to unseat Sandra Froman, a lawyer who has served on the board of the National Rifle Association (NRA) since 1992 and was president of the NRA from 2005 to 2007.
When Ruger reported first-quarter results Tuesday night, profits were down 33% year over year and sales were down nearly 22%. The company boosted its dividend by 39% to $0.32 per share for the quarter. The dividend varies quarterly and is based on a percentage of earnings.
The stock traded up about 1.5% Wednesday afternoon, at $58.55 in a 52-week range of $43.00 to $68.60. The 12-month price target on the stock is $67.00.