Kraft stands fast behind Gay Games

Nearly all investors reject opposition to sponsorship; company sticks with $25K pledge

By Published on .

A shareholder proposal to end Kraft Foods' support of the 2006 Gay Games VII was overwhelmingly rejected by the food company and its investors at its annual stockholders' meeting last week.

It's a rare occasion when a marketing sponsorship can take the stage at a shareholder meeting. But Kraft's decision to support the eight-day event in Chicago this July with a $25,000 donation rankled Kraft stockholder Dr. Marcella Meyer of Chicago, who proposed in a proxy statement that Kraft "disassociate itself" from the Gay Games themselves and any other future activities supporting "homosexual activity and lifestyle."

Dr. Meyer's proposal, rejected by 99% of stockholders, rested largely on the supposition that numerous studies have linked homosexual activity to sexually transmitted diseases that cause sickness and premature death, especially from AIDS, and that Kraft's support of the games could make it legally liable in the event that a young attendee decides to "experiment with homosexual encounters and later develops a serious, even fatal, illness."

In May of last year, Marc Firestone, Kraft's exec VP-corporate counsel and corporate secretary, sent a memo to Kraft employees reiterating the company's commitment to the event despite protests, voiced most loudly by the American Family Association. In the memo he stated, "Diversity makes us a stronger company and connects us with the diversity that exists among the consumers who buy our products." The company's board and stockholders agreed.

A board recommendation against Dr. Meyer's proposal was based on the idea that the contribution was "well within the scope" of Kraft's overall charitable-giving program, which totaled $85 million in food and financial support last year.
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