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New York
—
On an already head-spinning day of news for businesses and investors, the president lobbed a social media post into the mix that casually suggested regulators upend a fixture of Corporate American life for the past half-century.
ICYMI: Monday morning, President Donald Trump reignited one of his first-term pet projects, saying that public companies shouldn’t be required to report earnings once every three months, but rather every six months. “This will save money, and allow managers to focus on properly running their companies,” he wrote.
It’s not a particularly radical or new idea — most public European and UK companies are only required to report every six months. But the proposal comes as Trump has also sought to remake the American economy in his image and cast doubt on any data or institution that would in any way taint his legacy.
Trump isn’t alone in calling for a less frequent disclosure schedule.
The thinking among some academics and business leaders goes that requiring companies to disclose their finances every quarter, as the US has done since 1970, exacerbates Corporate America’s obsession with pleasing the stock market in the short term rather than focusing on long-term value creation. Trump pushed the idea briefly in 2018, tweeting that he’d urged the Securities and Exchange Commission to “study” moving to an every-six-months reporting system, though it’s not clear anything ever came of it.
And to be sure, “quarterly capitalism” has critics across the political spectrum. Hillary Clinton advocated in her presidential campaign for a multi-pronged solution to nudge executives to prioritize long-term growth and job stability over short-term profits.
Financiers Jamie Dimon and Warren Buffett argued in 2018 that public companies should reduce or eliminate the practice of estimating future quarterly earnings, which is slightly different from what Trump is proposing. Dimon and Buffett made clear that their views on earnings forecasts “should not be misconstrued as opposition to quarterly and annual reporting,” which they saw as essential for the integrity of public markets. (Companies are not required to give forward guidance on earnings, though many do voluntarily to help manage expectations on Wall Street.)
The argument for quarterly reporting is that efficient and fair public markets require transparency, no matter how annoying that may be to executives who have to pay people to do the actual compliance, accounting and public-relations work around that report four times a year. Even if you only own one share of a company, that sliver of ownership entitles you to know what is going on under the hood at a regular interval.
Getting rid of quarterly reports “would absolutely raise the risk premium for the US equity market compared to peers around the world,” wrote George Pearkes, global macro strategist for Bespoke Investment Group, referring to Trump’s proposal, in a Bluesky post. “This idea is terrible.”
To be sure, any change to the reporting schedule would need the SEC’s approval — something the agency’s Trump-appointed chair, Paul Atkins, could handily deliver — and would likely take months to implement.
The White House declined to comment beyond Trump’s social media post. In an email, a spokesperson for the SEC said that at Trump’s request, Atkins and the SEC are “prioritizing this proposal to further eliminate unnecessary regulatory burdens on companies.”
Bottom line: It’s no secret Trump cares deeply about optics, and he very much does not want to be held accountable for “bad” numbers. In both of his terms, the president has displayed an impulse to simply ignore or spin numbers that might taint his legacy.
Last month, when faced with data that suggested his tariffs are hurting the US job market, Trump fired the head of the Bureau of Labor Statistics and claimed the numbers were rigged.
Remember his fixation with his 2016 inauguration crowds? Or in March 2020 when he argued for keeping passengers on a cruise ship at sea because he “would rather have the numbers stay where they are?” Or the time he was found liable for fraudulently inflating the value of his real estate holdings?
That’s why it’s important to think of Trump’s pitch for less corporate transparency in the context of his attempt to obfuscate any bad numbers that might be associated with his administration. Corporate earnings have so far largely weathered the Trump trade war, which is partly why the stock market is still riding high despite cracks in the economy. But the longer tariffs remain in place, the heavier they’ll weigh on the bottom line.
