“U.S. President Donald Trump said on Friday he has asked the U.S. Securities and Exchange Commission to study the impact of allowing companies to file reports with the financial regulator every six months instead of every quarter,” Reuters reports.
“‘That would allow greater flexibility & save money,’ he said in a post on Twitter on Friday,” Reuters reports. “Trump said he called on the SEC to consider the change after talking with various business leaders. He said one executive suggested the change as a way to boost business, although he did not name the individual or the company.”
Reuters reports, “Trump recently hosted a number of top company leaders while on vacation at his private golf club in Bedminster, New Jersey, including the heads of Apple Inc, Fiat Chrysler Automobiles NV, Boeing Co, FedEx Corp, and Honeywell International Inc.”
Read more in the full article here.
MacDailyNews Take: Okay, so who’s going to wake up the SEC and ask them to actually do something?
You have a non-career politician in the seat that isn’t PC to wake up the SEC. Trump 2020!
This is an idea worth considering. I would not consider it earthshaking, by any means. But I applaud open debate on subjects like this to find new opportunities for efficiency and reduction in overhead. Whether or not this particular concept will actually materially help business remains to be seen.
Please temper your enthusiasm. Trump is far from the only POTUS to request inputs from industry and act on those inputs. This is nothing new, or particularly praiseworthy. You seem to be pulling at straws to praise Trump.
How about no reporting? Let’s get right to the point, why do we really even need the SEC anymore?
No oversight of any kind leads to opportunistic graft, softly paving the path to lawless government, inevitably followed by totalitarianism.
Everyone pisses and moans about government regulations. Why do they not piss and moan about government protections? — I’ll answer that! Because they want their cake and eat it too, and their tribal spokesperson inflames them, assuring them they can have it all if they only vote correctly.
He was being sarcastic.
This is a terrible idea. Really terrible. Only people who don’t do investing would like it. We’re supposed to wait a full 6 months to see how a company is doing? That’s crazy. How could we determine what’s going on?
Only a guy like Trump who doesn’t really understand business and investing would propose something like this. Remember that his businesses went bankrupt 6 times. If the banks didn’t bail him out, he would be working in a 7-11.
While I hear you, and I imagine it would be challenging for investors like yourself, as someone who has worked for Fortune 500 companies, I have seen the effects of quarterly reporting impact everything from customer service to overall operations, and reducing growth opportunities.
It’s a disastrous system that requires producing unrealistic expectations every 3 months. You’re always hesitating to try something new with 100% of your heart in it, as you don’t want to taint that 3 month picture for the sake of short term lag for long term growth, so it’s self-limiting.
A 6 month window makes far more sense, it gives investors a window every months, while allowing more time for companies to trial, test and build new things.
That’s totally wrong. The quarterly reporting is universal in virtually every country for public vehicles. There is no advantage, or disadvantage for anyone.
Moving it to 6 months removes much of the transparency we have now. These who are running corporations will find it easier to conceal problems. This is bad for everyone. A 3 month reveal is important to good governance. Of course, some in corporations like the idea of not having to report often. Why wouldn’t they? That doesn’t mean it’s a good idea.
Imagine if Tesla didn’t have to report more than twice a year! It would be a total mess.
6 month reporting would make it more difficult for corporations to raise money. Stock prices would be lower. Dividends would be lower. We would have more Enrons and Bernie Madoffs.
Would you think any better of Trump had he proposed a filing every month? Would you conclude that he understands business and investing a lot better?
As someone who ran a public corporation for over 20 years, I’ll give some insight. Corporations, at least the competent ones, do a monthly accounting, as required now, by law, in a way that gives most of the information managementvneeds tomproperly access the state of the business. You have to, or you won’t know what’s happening.
That said, the public quarterly accounting isn’t for internal, and tax purposes, but for the investing community. Do they need monthly reporting at that depth provided every quarter? No. 3 months is fine enough. And the costs would rise.
But putting it off for 6 months would keep everyone in the dark for too long. The excuse that companies would save a bit of money isn’t a good excuse. It’s a fair amount of money, but not really that much. Companies would love to be public, and reap the considerable advantages of that, but at the same time, report to that public as little as possible. As we know from the Bush recession, that the less reporting, and the less detail required, the greater the opportunity, and the chance of management doing what they shouldn’t do. Tightened reporting requirements, something the Trump administration is loosening, has resulted in less civil and criminal mismanagement since then.
But corporate oriented governments tend to ignore these problems. Remember that trump’s companies went bankrupt 6 times over his career, and without the banks and government bailing him out, he wouldn’t be here today.
Regarding your last sentence, would Trump be regarded as a Socialist, a freeloader, a typical Capitalist, or just a flim flam man? Situationally, he could be all of them. I already know that he cheats his partners when it’s to his advantage.
Investors who invest for the sake of short term profit are the bane of long term growth. It isn’t about the development of a product line to maturity or the quality of the product, it is the “I invested money, so I want it now” attitude.
Along with this proposal, why don’t they propose more restraint on the investors rights to dictate. Seems fair. Invest in a company you believe in; don’t invest so that you can dictate your returns. That kills!
I can Kerr….
“more restraint on the investors rights to dictate”
You must be referring to investor activists with large positions. The every day investor has the choice to buy or sell the stock. I’m not sure when you last “dictated” corporate behavior but I’d like to know the trick. Most Boards are chock full of CEO cronies who rarely push a poor performer out. As to compensation, the average annual compensation for a Fortune 500 CEO is @$10MM. There are great CEOs who deserve such pay (or more) like Jobs or Marchionne but most could be replaced by lieutenants who would perfom just as well for less.
Why not a compromise. Abbreviated reporting requirements for the first and third quarters, no guidance, no analyst calls just the basic numbers. Full reporting on the second (i.e. first half) quarter and 4th quarter.
Ranks up there with Trumps all-time moron moves.
The man will be in the Guiness Book of World Records multiple times, and he can be justly proud to share the stage with all manner of social deviants, idiot-savants, and senescent strong men. Even before becoming King of the World, he was already the textbook example of male sexual dominance (see Evolutionary Psychology, Buss, fifth edition 2015: Men in Positions of Power. Diamonds are a girl’s best friend.