BOSTON (Reuters) - Proxy adviser Institutional Shareholder Services on Friday recommended that investors vote in favor of a shareholder proposal at American Outdoor Brands Corp, parent of gun maker Smith & Wesson, calling for a report on the safety of the company’s products.
In a report e-mailed by an ISS spokesman, the leading proxy adviser also recommended that investors support all 10 director nominees at American Outdoor’s online-only shareholder meeting on Sept. 25.
The proposal was submitted by religious investors. The debate in the United States over gun safety and gun control grew in intensity following a mass shooting at a Florida high school in February.
ISS wrote the proposal was worth backing as a way to show the board it is looking at long-term risks, and noted the proponents ask the company to report on its efforts to produce safer guns.
“There is reason to believe that smart gun technology could be employed to make guns safer in the U.S. and that any engineering problems could be overcome if there was a market for the product,” ISS wrote in its conclusion.
Springfield, Massachusetts-based American Outdoor has said the report is unnecessary and that it already discloses its reputational and financial risks.
Elizabeth Sharp, American Outdoor vice president for investor relations, said in an email that the company was pleased with most of the proxy’s recommendations.
Sharp said, however, the company is “extremely disappointed in their decision to depart from our board’s recommendation on a stockholder proposal that would do nothing to make our communities safer, forwarded by a politically-driven proponent whose objective is not to create value for our stockholders, but to destroy value.”
On Thursday, rival proxy adviser Glass, Lewis & Co also recommended investors back the safety report, and recommended investors vote against one American Outdoor director.
In May, a majority of investors backed a similar safety report proposal at competing gunmaker Sturm Ruger & Company Inc
Reporting by Ross Kerber; Editing by Leslie Adler and Grant McCool