Rifles at the Ruger booth at the 2016 National Shooting Sports Foundation’s Shooting, Hunting, Outdoor Trade (SHOT) Show on January 19, 2016 in Las Vegas, Nevada. Photo by Ethan Miller/Getty Images.
The board of directors of Sturm, Ruger & Co. (RGR), one of the nation’s largest gunmakers, is urging shareholders to vote down a resolution that would require the company to monitor and report on the people its guns are used to injure or kill, according to a new Ruger filing with the Securities and Exchange Commission.
Ruger shareholders will vote on the resolution at the annual stockholders’ meeting being held in Prescott, Arizona, on May 9. The resolution would require the company to file a report by February 8, 2019, addressing three elements:
- Monitoring of violence committed with Ruger products
- Research and production of safer guns
- Reputational and financial risks to the company due to gun violence
TYT reported last week that Ruger’s risk warnings to investors, which are required by the SEC, have not included potential blowback from high-profile gun crimes, or the impact of electing gun-friendly politicians—despite widespread reporting about the drop in gun sales and stock prices after the election of Donald Trump.
In its March 27 SEC filing, the Connecticut-based company wrote that its board of directors recommends voting against the resolution. “We believe that firearms safety is a laudable and appropriate goal,” the filing says. “However, we also believe that adequate safety practices and procedures are available. Similarly, existing laws, if properly enforced, are sufficient to address the ‘public health crisis’ of gun violence which, first and foremost, is a law enforcement issue.” Ruger’s board includes CEO Chris Killoy, who has helped lead the company to funnel millions of dollars to the National Rifle Association.
The resolution was proposed by several institutional shareholders, led by The Sisters of the Holy Names of Jesus and Mary of Marylhurst, Oregon, a Catholic order that works for social justice.
A Ruger semiautomatic rifle was used in last year’s Texas church shooting that left 26 people dead. A supporting statement for the resolution says, “According to the Violence Policy Center, since 1987 Sturm Ruger & Co., Inc. products have been used in 7 mass shootings, responsible for killing 60 people and wounding 70 more.”
Other investors have also pushed Ruger on gun safety and gun crime. The company’s largest investor is the massive private-equity firm BlackRock, which after the Parkland, Florida, school shooting urged Ruger and other publicly held gunmakers to address public-safety issues. In BlackRock’s statement at the time, it suggested that it may begin taking an active role in investor votes on company policy at the gunmakers in which it owns stock.
Half of Ruger’s shares are owned by just half a dozen institutional investors. They are BlackRock, Vanguard Group, Capital World Investors, London Co. of Virginia, Voya Investment Management, and Dimensional Fund Advisors. As of the most recent filings, those six firms combined owned almost nine million shares out of Ruger’s total of 17 million.
Nor is BlackRock alone in pressuring gunmakers for a response to the rising tide of gun violence and especially high-profile gun massacres. Vanguard has indicated it also supports measures to address gun violence.
Although firms like these own considerable stakes in gun companies, those holdings are often not strategic or specific to gunmakers. BlackRock, for instance, only owns stock in gun companies because it lets its customers buy shares that are based on indexes—essentially stock portfolios that are defined by third parties, not by BlackRock. Nevertheless, those index purchases now give BlackRock and other private-equity firms considerable voting power within gun companies.
As TYT previously reported, one insider at an institutional investor with stakes in gunmakers said, “Ultimately, it seems like Sturm, Ruger and Smith & Wesson are choosing to do nothing. They don’t necessarily feel the need to do anything. That’s a choice . . . We need to assess all of these choices in terms of: Are you trying to maximize the business? That’s where we are.”
Ruger and American Outdoor Brands—which owns Smith & Wesson—have not responded to requests for comment. A spokesperson for the Interfaith Center on Corporate Responsibility, which works with socially active institutional investors, told TYT, “Investors believe Sturm Ruger and other gun manufacturers have an important role to play both to ensure that they are not indirectly complicit in these lethal events and in advancing the solutions that may help prevent them. We would hope that management sees the value in constructive engagement with its shareholders to achieve those ends.”
Ruger’s May meeting will also include elections for the nine seats on the board of directors. In its SEC filing this week, Ruger recommended re-electing the current board members.
TYT Investigates’ previous reporting on Ruger’s questionable SEC risk reporting: https://tytnetwork.com/2018/03/20/gunmaker-fails-to-disclose-investor-risks-in-sec-filings/
Jonathan Larsen is managing editor of The Young Turks.