Tired of reading quarterly reports? President Donald Trump is paying attention to this matter.
Trump on Monday morning wrote on Truth Social that he would prefer publicly traded companies be required to update investors twice a year instead of quarterly. The notion, he says, is that fewer reports would mean more time for managers to run their companies and less expense associated with compliance.
“Companies and Corporations should no longer be forced to ‘Report’ on a quarterly basis (Quarterly Reporting!), but rather to Report on a ‘Six (6) Month Basis.’ This will save money, and allow managers to focus on properly running their companies,” he wrote.
The SEC began requiring quarterly reporting in 1970, and some investors will undoubtedly push against the proposed change, which would inevitably mean less regular disclosure from companies. The CFA Institute’s position is a “hard no,” Sandra Peters, senior head of Global Advocacy at CFA Institute, told Investopedia in an interview, saying it promotes “less transparency” for investors who generally want more.
“Six months is a long time in a world where information is currency to not have reporting,” Peters said. A majority of CFA Institute members said they were against the idea in response to a survey conducted in 2018, she added.
A Revival of an Idea Trump Floated in 2018
Trump has floated the idea before. His first pitch to change how frequently public companies should be required to produce financial reports landed in the summer of 2018, in part inspired by then-Pepsico (PEP) CEO Indra Nooyi. Nooyi had suggested harmonizing American and European reporting standards; Europe in 2013 began requiring companies to report on a semi-annual basis, though, some exchanges still require quarterly disclosures.
That same year, JPMorgan (JPM) chief Jamie Dimon and Berkshire Hathaway’s (BRKB) Warren Buffett in a co-written op-ed in The Wall Street Journal argued that quarterly financials drove short-term thinking at public companies to the detriment of shareholders.
“Companies frequently hold back on technology spending, hiring, and research and development to meet quarterly earnings forecasts that may be affected by factors outside the company’s control, such as commodity-price fluctuations, stock-market volatility and even the weather,” they wrote.
Neither Dimon nor Buffett were against quarterly and annual reports, they wrote, but said the information disclosed and the frequency of reporting should suit the needs of the company and its investors.
Some other high-profile investment experts weren’t keen. Veteran stockpicker Leon Cooperman, who headed up the now-closed Omega Advisors, in 2018 called the idea “hypocritical” given how companies were “all over” money managers that manage their pensions for short-term performance.
Study Discussed Pros and Cons of Quarterly Reporting
The SEC under former Chair Jay Clayton studied the reporting system in 2018, seeking public comment on matters like the effectiveness of disclosure and investor protections, publishing a report listing pros and cons of quarterly financials. Pro: The more frequently companies report, the better investors can price in risk and “feel more confident about equity markets.” Cons: The dollar and time cost to putting out these reports can be onerous for smaller companies.
The Long-Term Stock Exchange, a trading venue that says it wants to help companies “drive long-term profit with purpose,” last week said it would petition the SEC asking for a change in reporting requirements, which it thinks could spur more companies to go public.
Data from Audit Analytics shows that average audit fees for US public companies rose to $2.57 million last year, the highest amount of the 20-year period the study covers. By industry, financial companies paid the most, on average, at almost $4.1 million in 2024.
A change would be subject to SEC approval, Trump said. A securities lawyer who spoke with Investopedia said that a change in the frequency of earnings reports would require a rulemaking process that could take months, between putting out a notice and asking for public comment on such a proposal. The regulator did not immediately respond to a query on the subject.
For more information from Investopedia on quarterly reporting, start here. And here’s some information on annual reports.
This article has been updated since it was first published to add new context and information.