Trump wants SEC to study half-year earnings reports
US PRESIDENT SAYS PEPSICO’S INDRA NOOYI URGED END OF QUARTERLY REPORTS
The US President Donald Trump said he’s asked the Securities and Exchange Commission to study ending quarterly reporting for US businesses in order to ease regulations and spur growth.
“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 US. ‘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!” Trump said in a Twitter post yesterday.
The chief executive officer who urged Trump to look into 6-month reporting is PepsiCo Inc.’s Indra Nooyi, the president told reporters in Washington after sending his tweet.
The regulatory burdens of being a public company have been in the spotlight lately, including playing a role in why Elon Musk wants to take Tesla Inc. private. And corporate leaders and trade groups have increasingly vented about Wall Street’s obsession with short-term earnings and revenue targets, arguing that can prevent firms from growing businesses and creating jobs.
A top criticism is that if companies are striving to report profit gains every quarter, they are more likely to buy back shares and cut costs than invest in their businesses.
Earlier this year, Berkshire Hathaway Inc.’s Warren Buffett and JPMorgan Chase & Co.’s Jamie Dimon urged companies to stop issuing quarterly earnings guidance. Moving away from reporting earnings every three months would be a much more dramatic change that would almost certainly trigger resistance from shareholders who want transparency from the companies they invest in.
“Investors will demand they get their information,” Ed Yardeni, founder of Yardeni Research Inc., said in a Bloomberg Television interview. “Shorttermism, that’s been floating around for a long time, just doesn’t jibe with the facts.”
The regulatory burdens of being a public company have been in the spotlight lately, including playing a role in why Elon Musk wants to take Tesla Inc. private.