What happened
President Donald Trump yesterday called for the U.S. to end its 55-year-old practice of requiring publicly traded companies to post quarterly earnings reports. He suggested that the Securities and Exchange Commission mandate six-month corporate earnings reports instead.
Who said what
Changing the reporting schedule would “save money and allow managers to focus on properly running their companies,” Trump said on social media, comparing the current quarterly report schedule unfavorably to China’s “50 to 100 year view on management of a company.” Trump also asked the SEC to consider switching to semi-annual reports during his first term, but no change was made.
Relaxing reporting requirements “might ease the burden for corporate managers” and limit the widely acknowledged “element of farce” in quarterly earnings calls, The New York Times said, but “critics say it would reduce the amount of information available to investors, regulators and the public.” In recent earnings reports, for example, “companies revealed that they had increased prices or planned to do so to offset the cost of tariffs.”
What next?
The SEC, which would have to approve any changes, said it was “prioritizing this proposal” at Trump’s request. And it “may have a chance to weigh in on such a change soon enough,” CNN said, thanks to an incoming petition from the Long-Term Stock Exchange, a marketplace focused on encouraging companies to focus on longer-term goals and performance.
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