Tractor Supply Co: Disclosure of Key Diversity and Inclusion Metrics

November 27, 2024 As You Sow

WHEREAS: Tractor Supply states in its 2024 proxy statement that “diversity and inclusion are values ingrained in our culture and essential to our business” and “diversity, equity and inclusion plays a key role in moving our business forward.”[1]

However, in a June 2024 8-K filing, Tractor Supply reported making apparently substantive shifts in its workplace diversity strategy, including eliminating diversity, equity, and inclusion (DEI) roles, ceasing to pursue DEI goals, and no longer submitting data to the Human Rights Campaign’s corporate survey.[2]

Many investors value ensuring that a company’s human capital management strategy results in a meritocratic workplace. Dismantling key DEI policies and practices may expose Tractor Supply to legal, financial, and reputational risks that will undermine its long-term growth.

Legal:

The 1964 Civil Rights Act prohibits racial and gender discrimination. It requires that companies maintain harassment policies “reasonably designed and reasonably effectual,” and an employer can be held responsible if it should reasonably have known that harassment was occurring. Reducing or eliminating DEI initiatives creates legal risk and may indicate a lack of corporate commitment to managing discriminatory behavior.[3]

Financial:

Many studies indicate that investors benefit from companies with management diversity. McKinsey studies have consistently found that companies with higher diversity in corporate leadership are more likely to outperform peers on profitability. This includes a 39 percent greater likelihood of outperformance for companies in the top quartile for diverse representation in executive teams versus those in the bottom quartile.[4]

A review by As You Sow and Whistle Stop Capital of management diversity in over 1,600 companies found statistically significant positive correlations for key financial indicators, including: return on equity, invested capital, revenue growth, and share price performance.

A 2024 meta-analysis found that companies with DEI initiatives experience increased innovation, enhanced employee engagement and satisfaction, and improved decision-making.[5]

Long-term growth:

Tractor Supply’s core consumers are rural Americans, a demographic on the cusp of significant change. The percentage of non-White rural Americans rose 19 percent between the 2010 and 2020 census.[6] The current average age of American farmers is over 58 years, with almost 40 percent over 65. Among new farmers, 41 percent are female, with more women than men involved in financial management.[7]

BE IT RESOLVED: Shareholders request that Tractor Supply’s Board prepare and issue a report, at reasonable expense, excluding proprietary information, describing the research and analysis the Board undertook before making changes to its DEI policies and practices in Summer 2024.

SUPPORTING STATEMENT: Shareholders suggest the report include, at Board discretion:

A qualitative and quantitative description of the DEI-related concerns raised by the Company’s consumer base, if any;
The process and level of Board involvement in decision-making related to the Company’s DEI strategy;
Current and planned strategies to ensure a workplace free of harassment and discrimination; and
Any foreseeable impacts on the Company's ability to source diverse talent, consumer sentiment, or brand value.

[1] https://www.sec.gov/ix?doc=/Archives/edgar/data/916365/000119312524077638/d569535ddef14a.htm

[2] https://www.sec.gov/ix?doc=/Archives/edgar/data/916365/000091636524000077/tsco-20240627.htm

[3] https://niwr.org/wp-content/uploads/2024/10/NIWR-Summary-Memo-on-DEI.pdf

[4] https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-matters-even-more-the-case-for-holistic-impact

[5]https://www.researchgate.net/publication/380115625_ENHANCING_ORGANIZATIONAL_PERFORMANCE_THROUGH_DIVERSITY_AND_INCLUSION_INITIATIVES_A_META-ANALYSIS

[6] https://ruralinnovation.us/blog/who-lives-in-rural-america-part-i/

[7] https://www.nass.usda.gov/Publications/Highlights/2020/census-beginning%20-farmers.pdf; https://www.nass.usda.gov/Publications/Highlights/2024/Census22_HL_FarmProducers_FINAL.pdf

Resolution Details

Company: Tractor Supply Co.

Lead Filers: As You Sow

Year: 2025

Filing Date:
November 2024