In March, the U.S. Securities and Exchange Commission ruled that General Electric Co. and a number of other U.S. companies must allow shareholders to vote on proposals put forth by People for the Ethical Treatment of Animals.
Groups like PETA frequently buy small amounts of stock in publicly held companies so they can have a chance to voice their opposition to animal testing or other polices at shareholder meetings. For the most part, this is a pretty ineffective strategy as it rarely generates even minimal media coverage anymore.
An alternative is to submit a proposal for shareholders to vote on, as PETA did, that would require the company to stop its animal testing. Typically, companies refuse to include such proposals arguing that something like testing with animals is simply a routine part of the business and outside the realm of shareholder proposals.
When GE and other companies rejected its proposal, PETA appealed to the SEC and the SEC agreed with PETA that shareholders should be allowed to vote on the proposal.
PETA’s Mary Beth Sweetland told the Associated Press,
We are pleased that the SEC agrees with us that shareholders have a right to vote on important issues affecting their investments. With caring consumers now boycotting companies that conduct animal tests, adopting progressive humane alternatives can have a significant impact on a company’s bottom line.
Of course if consumer’s were really boycotting GE because it tests on animals, its a bit difficult to understand that company’s 2005 profit outlook that estimates $1.78 to $1.83 in profits per share.
GE shareholders ultimately rejected the PETA resolution.
Source:
SEC rules against GE on animal testing. John Christoffersen, Associated Press, March 25, 2005.