BOSTON (Reuters) – Gunmaker Sturm Ruger & Co (RGR.N) directors faced little opposition at its recent board election, a securities filing showed on Monday, despite its policy of not talking with shareholders even in the midst of a national debate over gun control.
Additionally, a proposal calling for Ruger to produce a report on the safety of its products was supported by 7.2 million votes, with 3.3 million votes cast “against.”
All nine of Ruger’s candidates won more than 10 million votes “for” a one-year board term at its annual meeting on May 9, the filing showed. The highest number of votes “withheld” from any director was 425,763.
Ruger’s proxy showed BlackRock with 2.9 million shares of Ruger’s common stock, just under 17 percent, as of March 15, and Vanguard with 1.7 million shares, or 9.5 percent, meaning neither could have withheld all support from the directors.
BlackRock and Vanguard declined to state how they voted.
Both fund managers were among major financial firms that had said they would speak with weapons companies about the safety of their products after the February shooting at Marjory Stoneman Douglas High School in Florida that left 17 dead. BlackRock has also made plans to offer gun-free investment strategies.
Ruger’s meeting had been seen as an early test of how far the investment firms would push their concerns.
Chief Executive Christopher Killoy declined to meet with gun safety activists at the meeting, saying the company does not meet even with major investors BlackRock or Vanguard.
Ruger had said the directors were elected and the shareholder proposal passed but it had not provided vote tallies.
University of Pennsylvania law professor Jill Fisch, who follows corporate governance, said opposition to the directors seemed low considering the concern financial companies expressed about gun safety issues after the Parkland shooting.
“I’m surprised given the current debate that the withhold levels are as small as they are,” Fisch said in a telephone interview. “Clearly the institutional investors are not trying to make a statement through their voting on directors.”
For each nominee and for the shareholder proposal there were also 5.1 million “non-votes,” the filing showed.
Ruger did not reply to a request for comment on the tallies.
Monday’s filing showed that at the meeting Killoy said a reason for Ruger’s no-meeting policy was a federal securities rule known as “Regulation FD” for fair disclosure that is meant to prevent companies from selectively disclosing material information to investors.
Asked about Killoy’s comments, Carolyn Wegemann, a spokeswoman for Vanguard of Pennsylvania, said by email that it “has had 1000+ engagements with public portfolio companies over the past year alone (hundreds of these discussions have included members of the board), all without raising Reg. FD concerns.”
In 2016 and 2017, BlackRock voted against directors at Exxon Mobil Corp (XOM.N) over the company barring talks with outside directors. Last year, Exxon said its board had ended a prohibition on outside directors meeting with shareholders.
BlackRock’s proxy voting guidelines posted on its website state that it expects boards to be “engaged and responsive.”
Although rules do not require talks with investors, representatives of big investment firms and academics who follow corporate governance said such meetings are common.
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