Smith & Wesson facing increasing pressure on gun violence risk report
Another proxy advising firm recommended Smith & Wesson shareholders support a proposed gun violence risk report, according to regulatory filings published this week.
In a policy voting recommendation sent to parent company American Outdoor Brands Sept. 7, Institutional Shareholder Services expressed support for the report — a proposal backed by faith-based investors — despite repeated public criticism from the gun maker’s top executives.
Smith & Wesson doubled down on those sentiments Monday, discrediting the gun violence statistics cited in the proposal and describing any suggestion shareholders don’t “fully understand the financial and reputational risks involved” in investing in a firearms manufacturer as “naive and disingenuous at best.”
Chief Executive Officer James Debney said the Sisters of the Holy Names of Jesus and Mary, the activist group behind the report, knowingly abused the company’s proxy system just to advance a political agenda — and warned fellow investors not to fall for it.
“Unlike a bonafide investor, this proponent purchased just 200 shares, the bare minimum needed under SEC rules to place an item on the proxy with the sole objective to push an anti-firearms agenda, designed to harm our company, disrupt the local sale of our products and destroy stockholder value,” he said during an Aug. 31 conference call. “This proponent will gladly sacrifice its investments and yours to achieve its political objectives.”
Last month, the nun group filed a resolution asking American Outdoor Brands Corporation to report on the risks involved in selling firearms and take “the first steps towards acceptance of this responsibility.” Shareholders will vote on the resolution at the company’s annual meeting Sept. 25.
“Contrary to what the company suggests, AOBC has both the responsibility and capacity to play a more active role in how its products are used,” the resolution concludes, noting since 1984, Smith & Wesson manufactured firearms used in five mass shootings that left 43 people dead and more than 80 wounded.
ISS agreed, advising shareholders “a vote for this proposal is warranted as additional information on the company’s policies and practices to mitigate harm from its products would help shareholders assess management’s oversight of related risks and opportunities.”
Smith & Wesson argues such a report wastes resources because tracking illegal firearms use won’t give the company any ability to prevent such crimes from happening in the first place. Instead, Smith & Wesson says it only distributes to licensed retailers and wholesalers and works closely with the Bureau of Alcohol, Tobacco, Firearms and Explosives to trace guns recovered at crime scenes.
“The ISS Report either misses the obvious or, worse, chooses to ignore it,” Smith & Wesson concludes in the Sept. 10 filing. “Proponent has no interest in safety, governance, or risk mitigation, but rather the disruption of the lawful sale of our products which will inevitably destroy value not create it. Political issues should be debated and decided in the federal and state legislatures not at the annual meeting of stockholders.”
Shareholders backed a nearly-identical proposal at Sturm, Ruger and Company’s annual meeting in May.
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