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Trump asks SEC to consider benefits of reporting earnings just twice a year

Illustration of Trump leaning over and speaking at a table (in black and white) with an orange background
Illustration: Axios Visuals

President Trump this morning tweet-proposed a fundamental change to U.S. corporate governance and transparency:

"In speaking with some of the world’s top business leaders I asked what it is that would make business (jobs) even better in the U.S. 'Stop quarterly reporting & go to a six month system,' said one. That would allow greater flexibility & save money. I have asked the SEC to study!"

Be smart: It's too early to know how serious Trump is about this, as this was just one of six (and counting) morning tweets, but some quick thoughts (below the fold):

  • There is little doubt that too many public company operations are perverted by "short-termism," and it can have a negative impact on hiring.
  • But halving the number of reporting periods is certain to reduce the amount of information available to investors, without solving the core problem of CEOs trying to meet artificial data deadlines.
  • A much more commonly-suggested fix would be to change CEO incentives, primarily by decoupling compensation from short-term stock price goals.
  • And, of course, a regular reminder that CEOs don't need to obsess over quarterly numbers. It's a choice.
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