Business leaders encourage move away from quarterly earnings reports

"Short-Termism Is Harming the Economy," JP Morgan Chase CEO Jamie Dimon and Berkshire Hathaway Chairman Warren Buffett write an op-ed for The Wall Street Journal.

Why it matters: "The pressure to meet short-term earnings estimates has contributed to the decline in the number of public companies in America over the past two decades. Short-term-oriented capital markets have discouraged companies with a longer term view from going public at all, depriving the economy of innovation and opportunity."

• "Fewer public companies has also meant fewer opportunities for retail investors to create wealth through their 401ks and individual retirement accounts."
• "Even as the overall number of public companies declines, more than 100 million Americans invest in them directly or through mutual funds. Millions more do so through their participation in corporate, public and union pension plans."

What they're proposing, via Business Roundtable — of which Dimon is the chair:

• "[W]e are encouraging all public companies to consider moving away from providing quarterly earnings-per-share guidance. In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability."
• "U.S. public companies will continue to provide annual and quarterly reporting that offers a retrospective look at actual performance so that the public, including shareholders and other stakeholders, can reliably assess real progress."
• "Anything America — and America’s public markets — can do to focus on the future and build long-term wealth and opportunity will make the country stronger, more resilient and more competitive."