Gun Control Activists Target Sturm Ruger’s Shareholder Meeting

Sturm Ruger, one of the country’s largest gun companies, will face challenges on Wednesday from investors who say firearms makers need to push for safer weapons and loosen ties to the National Rifle Association.

The occasion, the company’s annual meeting, will be the first chance for activist shareholders to confront a publicly held American gun maker since 17 people died in Parkland, Fla., in a school shooting in February. They are hoping to lean on the firearms industry to adopt changes such as improved tracking and safer technology, and have prepared for the event for months.

Ruger has declared its opposition to the measures, and approval by shareholders faces long odds. But the activists say they are trying to raise issues that they may take to other shareholder meetings.

One of the groups, Amalgamated Bank, an institutional investor and a retail bank that promotes social justice issues, worked with other groups that have tried to convince major shareholders like BlackRock and Vanguard that Ruger’s close ties to the N.R.A. have exposed the company to risk.

Another, a coalition of shareholder activists, submitted a proposal pressing Ruger to report on its efforts involving firearms safety and research.

But Brian G. Rafn, a principal at Morgan Dempsey Capital Management who has worked with Ruger’s institutional investors for decades, said he had doubts about the effect of the efforts.

“It’s like throwing rocks at a U.F.O. — you’re not going to do much damage,” he said, adding that it would be hard to bring change unless the firearms business went into an extended decline. “This business is cyclical and will have ebbs and flows, but it’s been robust.”

Amalgamated said Tuesday that it planned to withhold its vote to reappoint Sandra Froman, the only woman on Ruger’s board, to the seat she has held since 2015. Ms. Froman, a lawyer, has also served on the N.R.A.’s board since 1992 and was its president from 2005 to 2007. She helped organize a breakfast at the N.R.A.’s annual meeting in Dallas this month, where President Trump and Vice President Mike Pence spoke.

In a letter sent to Ruger last month, Amalgamated’s chief executive, Keith Mestrich, said Ms. Froman’s connections to the gun group “may inhibit objective assessment and management of the risks” that Ruger faced.

Ruger has contracted with the N.R.A. for some of its promotional and advertising activities and has made over $9 million in payments to the group over the last two years, according to public filings.

Amalgamated has chastised Ruger for its declining sales and profit, which continued sliding in its most recent quarter. But its stock has managed to avoid the steep drops suffered by other gun manufacturers.

Amalgamated’s letter also called for Ruger to encourage so-called smart guns equipped with safety and tracking technology. In addition, Mr. Mestrich asked that Ruger publicly support more thorough background checks for gun buyers, enforcement of gun laws and research into gun violence.

Amalgamated said it would not back Ms. Froman’s nomination unless Ruger agreed to its terms. As of Tuesday, the firearms company had not responded to the letter, but it said in a Facebook post last month that it had “no plans to submit to the demands” of the bank.

Ms. Froman did not respond to requests for comment.

Ruger is based in Southport, Conn., but is holding its shareholder meeting in Prescott, Ariz., at a hotel a short drive from one of its factories.

On Wednesday, the company must also contend with a proposal filed by 11 members of the Interfaith Center on Corporate Responsibility, a shareholder advocacy group. The filers, including health care networks and several groups of Roman Catholic nuns, are asking the Ruger board for more transparency and accountability into how it keeps track of crimes committed with its products and investigates safer gun technology.

Ruger has recommended that investors vote against the proposal, saying in a public filing that “the intentional criminal misuse of firearms is beyond our control.”

But Institutional Shareholder Services, a proxy advisory firm, has backed the effort, describing it as a push for “concrete evidence that the board is properly assessing risks to the company’s long-term viability.”

BlackRock, which holds a 16.9 percent stake in Ruger, and Vanguard, which has a 9.5 percent stake, are Ruger’s largest shareholders. They declined to say how they planned to vote on Ms. Froman’s nomination and on the Interfaith Center’s proposal.

Ruger has faced previous pressure to open up. In 2016, New York’s public advocate asked the Securities and Exchange Commission to look into allegations that Ruger had misled investors and failed to properly disclose its reputational and liability risks.

“This is not the first time this has happened, though there’s a little more intensity now,” Mr. Rafn said of calls for changes in the gun industry. “This is a very, very polarized time, with everyone lining up on either side of the fence.”