President Trump is pushing the SEC to replace quarterly earnings with biannual reports, reshaping corporate transparency, investor strategy, and long-term economic planning in the U.S.
Few things mark the end of a three-month financial period like a publicly traded U.S. corporation sharing its quarterly earnings summary. This has become the norm for more than half a century, but recent comments made by President Donald Trump suggest changes could be coming to the frequency at which this information is shared.
In a flurry of posts to Truth Social on Sept. 15, Trump advocated for replacing quarterly reporting with a new SEC rule that would require firms to disclose their financial data every six months. He argued this move would “save money, and allow managers to focus on properly running their companies.”
The Securities and Exchange Commission (SEC) first mandated quarterly filings — known as 10-Qs — in 1970. These quarterly reports are divided into two main parts. The first portion details the company’s financial statements, any market risks, management’s analysis of how the business is doing, and updates on internal controls. Internal controls are basically the system a company sets up — its people, processes, and tools — to make sure things run efficiently and goals are met. It helps keep an eye on resources, prevents fraud, and protects both physical stuff like equipment and intangible things like the company’s reputation or trademarks. All of this helps both individual and institutional investors get a clearer picture before making major decisions.
The second part delves into other equally significant details — things like ongoing lawsuits, potential defaults, or unregistered sales of stock. These are the kinds of issues companies would rather keep to themselves, but by law, they have to publish. That level of transparency gives the public a crucial layer of accountability. For example, a company like The Walt Disney Co. shares details like revenue earned for that timeframe, operating income, and share outlooks for the next few months. Upon looking at those, one could determine whether missing profit estimates could result in a price increase for its streaming platforms (which it just announced on Tuesday, much to the chagrin of users). Canadian public companies also report quarterly, while other markets, including the European Union, have maintained a six-month reporting model.
There are benefits and drawbacks to doing away with the quarterly reports model, but this isn’t the first time Trump or anyone else has pushed for this change in legislation. Trump made a similar request during his first term in 2018. Now in his second term, when he’s clearly wielded more of his power to make semi-permanent decisions that’ll affect American life, anything feels possible or, at the very least, challengeable.
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Hillary Clinton’s Warnings Reemerge
Although the discourse may have picked up steam from several years ago during his initial term in office, Trump isn’t the first person to have proposed eliminating quarterly earnings. In 2018, Jamie Dimon and Warren Buffett penned an op-ed in the Wall Street Journal promoting the abolishment of quarterly earnings forecasts. “Reducing or even eliminating quarterly earnings guidance won’t, by itself, eliminate all short-term performance pressures that U.S. public companies currently face, but it would be a step in the right direction,” they wrote. “Anything America — and America’s public markets — can do to focus on the future and build long-term wealth and opportunity will make the country stronger, more resilient, and more competitive. Over the long run, this will strengthen the U.S. economy, benefit America’s workers, shareholders, and investors, and leave a generational legacy we can be proud of.”
Concerns over short-termism in corporate America aren’t new. A decade ago, during her own presidential run against Trump, Hillary Clinton favored the exact same thing. Calling it “quarterly capitalism,” the former secretary of state’s argument posits that American corporate executives have increasingly prioritized short-term financial gains at the expense of long-term investments that, while potentially beneficial to the broader economy, may not yield the immediate returns demanded by certain shareholders.
In her words, “real value comes from long-term growth and not short-term profits.”
The difference between Trump and Clinton’s ideologies lies in the fact that the latter provided concrete alternatives alongside the proposition. Clinton outlined five key policy priorities, including a proposal to tax capital gains on a six-year sliding scale and an extension of the holding period required before gains are taxed below the top rate of 39.6%. The former senator also criticized the growing influence of activist shareholders focused on short-term returns at the expense of long-term value creation. Clinton additionally called for reforms to executive compensation structures, emphasizing the need to realign CEO pay incentives and enforce disclosure requirements outlined in the 2010 Dodd-Frank Act.
The proposal was met with its fair share of pushback, many claiming she was still playing it safe to kowtow to Wall Street’s penchant for greed. The desire to roll back a decades-old policy didn’t earn her a lot of popular points among allies and voters, and as USA Today wrote at the time, it ignored some obvious inconsistencies. For one, naysayers didn’t take into account the U.S. regulatory requirement that public companies file earnings reports every quarter. This mandate drives the very short-term focus they seek to address. International comparisons suggest that quarterly reporting not only discourages long-term investment but also increases the likelihood of earnings manipulation to meet shareholder expectations.
Around the time she suggested this in 2015, the Center for American Progress released solutions to curb some of the more aggressive demands for ending quarterly earnings. The proposed compromises — such as lengthening the vesting period for executive stock options and limiting how many can be exercised — aim to shift executive focus away from short-term stock performance and toward long-term company health. Similarly, Clinton’s tax proposals, including the Buffett Rule and closing the carried-interest loophole, target behaviors that prioritize short-term financial gains. Now, you see how these ideas align with her push for ending quarterly earnings reports but still keeping the promise of ethical business practices by corporations.
So, What Next?
Let’s say Trump moves forward with his plot to dismantle quarterly earnings: What happens next? According to CNBC, the guidelines could be changed either by the SEC or through Congress, but honestly, it wouldn’t need any action from lawmakers in Washington. All it would take is a majority vote at the SEC, and right now, Republicans have a 3-1 advantage, with one vacant seat. According to Sarah Bianchi, chief strategist for international political affairs at Evercore ISI, the whole procedure from start to finish would probably take about six to twelve months.
“Administrations have, to varying degrees, given policy steers to the SEC, and with Trump’s directive, this is now something that has to be taken seriously as a possibility,” said Bianchi. “However, the SEC has also historically been able to operate with some measure of independence.”
The SEC also confirmed it would look into appeasing Trump’s request with utmost priority, though Chairman Paul Atkins has yet to comment further. In the first year since returning to the White House, we’ve witnessed the unprecedented level of authority Trump has exercised to undermine government agencies, with large support from the Supreme Court in the process. However, the Wall Street Journal says this ruling won’t be as easy to implement. In fact, expect some heavy defiance in the coming months.
They wrote: “Institutional investors such as pension funds and hedge funds typically crave more information on the companies they follow, not less. In other countries where regulators removed quarterly reporting requirements, many companies still report more frequently.”
As it stands, everyone from investors to execs and even media platforms is waiting with bated breath to see what the SEC will do or if more orders will be directed from the White House. The third fiscal quarter ends on Sept. 30, so expect earnings reports to arrive starting in mid-October and continuing through November. Boardroom’s daily newsletter Headline to Go frequently summarizes these documents, so make sure to stay informed on new developments coming out of both the federal government and corporations.
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