President Trump on Monday suggested U.S. public companies should no longer have to report earnings quarterly, but on a six-month schedule instead.
Why it matters: It would be a fundamental change in the way American companies do business, and more closely aligned with how public companies report results in Europe and elsewhere.
- The change would require approval from the Securities and Exchange Commission (SEC), which told Axios it is "prioritizing" the proposal.
What they're saying: "This will save money, and allow managers to focus on properly running their companies. Did you ever hear the statement that, 'China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis???' Not good!!!" Trump said in a Truth Social post.
Flashback: The SEC has required quarterly reporting of public company earnings results since 1970.
- The debate over moving to a half-year system is not a new one; it came up during Trump's first term as well.
The big picture: Some of America's top business leaders, among them Jamie Dimon and Warren Buffett, have called for an end to quarterly reporting before.
- The argument is that it makes companies focus too much on short-term performance at the expense of long-term planning — and can be too expensive for small companies, too.
Yes, but: Experts say simply taking away a regular reporting obligation isn't necessarily the solution.
- "Trying to get companies less hyper focused on the short-term quarterly hamster wheel would be good, but it's far from clear that reducing investor disclosure to semi-annual reporting would do that," Dennis Kelleher, CEO of advocacy group Better Markets, tells Axios.
- "The real solution would be getting Boards of Directors to incentivize and then support corporate executives to focus more on the long term and less on the short term."
What to watch: What the SEC does next with Trump's suggestion.
- TD Cowen analysts, in a note Monday, said given Trump's focus on pulling back regulations, Monday's post moves the change "from improbable to probable though not guaranteed."
Editor's note: This story was updated with SEC comment.
