Sturm Ruger, one of the largest gun manufacturers in the nation, is facing pressure from investors who believe Ruger’s ties to the National Rifle Association constitute a long-term risk to the company, according to the New York Times.
Investors and activists plan to raise several issues at Ruger’s annual shareholder meeting Wednesday, including demands that the company loosen its relationship with the NRA and put more emphasis on gun safety technology.
What’s the story?
The activist push is led by Amalgamated Bank, which last month sent Sturm Ruger a letter detailing concerns about the company’s declining profits, a board member’s dual role with the NRA, and a sales strategy that “has relied too heavily on existing owners buying more guns out of fear of future regulation.”
Amalgamated Bank is an institutional investor and retail bank that, according to the New York Times, promotes social justice issues. Amalgamated has $48 billion in assets, and has a “significant number” of Ruger shares in its managed portfolios.
Amalgamated targeted the Ruger board membership of Sandra Froman, who served as NRA president from 2005 through 2007, and who continues to serve as an NRA board member. The bank wrote that Froman’s membership on Ruger’s Risk Oversight Committee created a conflict of interest.
“The NRA not only has the power to influence RGR’s (Ruger’s) choices through its lobbying and member mobilization, but through its financial relationship with RGR,” an April 18 letter to Ruger read.
Amalgamated plans to withhold support for Froman’s nomination to the board.
The bank made the following demands of Ruger:
- Support legislation requiring a completed background check on all gun purchases
- Support fully funding the Bureau of Alcohol, Tobacco and Firearms to enforce existing laws
- Support measures to enable the Centers for Disease Control to conduct research on gun violence
Amalgamated also wants Ruger to enforce dealer responsibility for reporting lost or stolen inventory, work to identify gun dealers who repeatedly divert guns to illegal use, and incorporate existing safety and tracking technology into firearms.
Other institutions and coalitions are pushing agendas at the shareholder meeting as well. A coalition called Another is pushing Ruger to report on firearm safety and research efforts. Members of the Interfaith Center on Corporate Responsibility are calling for transparency and accountability by Ruger regarding crimes committed with its products.
Will it have an impact?
Because of the strength of the gun industry, its unlikely that Wednesday’s efforts will have much impact on Ruger, and the activists acknowledge that this is part of a long-term strategy to influence Ruger.
“It’s like throwing rocks at a UFO,” said Brian G. Rafn, a principal at Morgan Dempsey Capital Management who has worked with Ruger, according to NYT. “You’re not going to do much damage. This business is cyclical and will have ebbs and flows, but it’s been robust.”