Investor activists will campaign against Sturm Ruger directors

[April 09, 2019]   By Ross Kerber

BOSTON (Reuters) - Investor activists said on Monday they will campaign to unseat two directors at gunmaker Sturm Ruger & Co, citing what they called its resistance to their concerns after shareholders won a battle over safety at last year's annual meeting.

The plan for this year's gathering, set for May 8 in New Hampshire, promises to renew a debate over how the company might respond to a series of mass shootings across the United States, including at schools, houses of worship and workplaces.

The activists include Majority Action, a liberal-leaning shareholder group, and religious investors affiliated with the Interfaith Center on Corporate Responsibility. While they hold a small number of Sturm Ruger shares, last year members of Interfaith Center won backing for a resolution from fund companies including top Ruger shareholders BlackRock Inc and Vanguard Group, showing an ability to set the agenda.

This year the activists said they will call on other investors to vote "withhold" on Sturm Ruger Chairman Michael Jacobi and on company director Sandra Froman, who is also a director of the National Rifle Association and was its president from 2005 to 2007.

Eli Kasargod-Staub, Majority Action's executive director, said in an interview that Sturm Ruger should take a harder look at "smart gun" technology and hold talks with investors, dialogue it has rejected in the past.

He also said the company should step back from divisive cultural issues promoted by the NRA. Together, the topics "are the kind of issues that can and have been productively engaged on through dialogue with long-term investors at other companies," he said.

Worker Marilyn MacKay assembles a rifle at the Sturm, Ruger & Co., Inc. gun factory in Newport, New Hampshire January 6, 2012. REUTERS/Eric Thayer/File Photo

A Sturm Ruger spokesman did not respond to messages on Monday.

Sturm Ruger and Smith & Wesson parent American Outdoor Brands Corp have faced new attention from gun safety activists after 17 people were killed at a mass shooting at a Florida high school in early 2018.

At Sturm Ruger's annual meeting last May a resolution that called on the company to produce a report on the safety of its products won about two-thirds of votes cast over the company's opposition. The document issued in February outlines safety features, improved background checks and other steps Sturm Ruger has taken, though the company cast doubt on the viability of smart guns and other technical changes suggested by the activists.

Top fund firms also backed all company directors despite their rare stance of avoiding talks with investors.

Sturm Ruger Chief Executive Christopher Killoy said at the meeting that fair disclosure rules kept it from speaking with BlackRock or Vanguard, although such meetings are common elsewhere.

(Reporting by Ross Kerber; Editing by Leslie Adler)

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