President Donald Trump stated on Monday that U.S. companies should transition to biannual reporting instead of the current quarterly standard, claiming this change would reduce expenses and enable executives to concentrate on managing their businesses effectively.
“This will save money, and allow managers to focus on properly running their companies,” Trump mentioned on Truth Social. He added, “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!!!”
https://truthsocial.com/@realDonaldTrump/posts/115208219886830624
While Trump criticized the quarterly reporting structure in the context of China, it’s worth noting that Chinese companies also submit quarterly reports, alongside semiannual and annual filings. However, firms on the Hong Kong stock exchange only need to file semiannual reports.
Implementing this change would necessitate approval from the Securities and Exchange Commission (SEC), which mandated quarterly reporting for U.S. public companies in 1970.
If quarterly earnings reports were abolished, the U.S. would align more closely with practices in the United Kingdom and the European Union, where companies are required to report biannually but can also choose to submit quarterly reports.
Proponents of this policy change argue that quarterly reporting is overly costly and time-consuming, while opponents warn it could lead to less transparency and greater market instability.
In 2018, JPMorgan Chase CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett expressed support for reducing or eliminating quarterly reports, stating, “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,” in a Wall Street Journal op-ed.
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This isn’t the first instance of Trump advocating for the end of quarterly reporting. During his initial term, he requested that the SEC consider moving to semiannual reports instead of quarterly ones, but the agency did not make any recommendations at that time.
