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PETA courts shareholders
Group says GE, 3M, Schering-Plough must allow votes on alternatives to animal testing.
March 23, 2005: 1:45 PM EST
By Parija Bhatnagar, CNN/Money staff writer

NEW YORK (CNN/Money) - People for the Ethical Treatment of Animals (PETA), citing recent Securities and Exchange Commission rulings, said Wednesday that the boards of General Electric and two other companies must allow shareholders to vote on resolutions seeking to replace "painful and deadly" animal testing with more humane alternatives.

According to the group, all three companies -- GE, 3M, and Schering-Plough -- had argued with the regulatory agency that the PETA-sponsored resolutions should be declared ineligible for consideration by their stockholders.

"We believe that shareholders have the right to vote [at the companies' annual meetings] on an issue that involves animals when the treatment of those animals will affect their investment," PETA's senior vice president Mary Beth Sweetland said in a statement.

"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," she said.

The PETA-backed resolutions are included in the companies' "proxy" materials, which are mailed to thousands of investors. Additionally, the group said it had also sent a "special package" to each of the companies' top 10 shareholders to tell them about its efforts.

Industry watchers point out that shareholder resolutions are a frequently used tactic of activist groups who understand the attention and publicity they attract.

All that is required to submit a shareholder resolution is for an activist group to either directly buy shares of the company they're targeting or ask existing shareholders who may be PETA members to file a resolution of the group's behalf.

PETA has done both in the past, according to spokeswoman Jessica Sandler. And while the SEC can mediate and remove these resolutions, branding experts say companies generally try to avoid bringing undue attention to the matter in order to stave off negative publicity.

PETA has used the same strategy in recent months to force several restaurant chains, including McDonald's (Research), Wendy's (Research) and Denny's, to adopt recommendations for less cruel animal slaughter methods.

A Schering-Plough spokeswoman responded by saying the drugmaker had addressed the matter of animal testing in its proxy statement by saying it seeks alternatives when possible.

"When animal testing is needed, Schering-Plough is committed to standards of humane and responsible animal care set forth by both government and private agencies," the company said in its proxy statement.

General Electric (Research) and 3M (Research) could not immediately be reached for comment.

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