Trump backs CEOs, proposes easing corporate reporting rules

Trump backs CEOs, proposes easing corporate reporting rules

Trump backs CEOs, proposes easing corporate reporting rules

Writing on Twitter, Trump said that he had discussions with business leaders and that one leader had asked him to move toward a system of reporting every six months.

He suggested that a switch to only half-yearly reporting would save companies money, echoing the wishes of several top chief executives.

Reuters reported that reducing the reporting requirements to bi-annually instead of quarterly would end up moving the United States rules closer to the rules that the European Union and the United Kingdom have adopted.

Switching to a six-monthly reporting system would "allow greater flexibility and save money", Mr Trump said.

Trump tweeted, "I have asked the SEC to study!", but it officially can only be a request, not an order.

But moving away from reporting earnings every three months would be a much more dramatic change that would nearly certainly trigger resistance from shareholders who want transparency from the companies they invest in.

Trump held a dinner for business executives on Aug 8, two days after Nooyi announced her departure, at his golf club in Bedminster, New Jersey.

Kevin Lamarque/ReutersU.S. President Donald Trump hosts a meeting with business leaders in the Roosevelt Room of the White House in Washington January 23, 2017. "So we're looking at that very, very seriously". Visit MarketWatch.com for more information on this news.

Nooyi said in an e-mailed statement, "Many market participants, as well as the Business Roundtable which we are a part of, have been discussing how to better orient corporations to have a more long-term view. My comments were made in that broader context, and included a suggestion to explore the harmonisation of the European system and the U.S. system of financial reporting". "One of the inherent issues with quarterly reporting is that it does tend to drive management to make decisions geared toward short-term metrics, which is not always in everyone's best interest".

The president did not name the leaders. Japan, though, moved in the opposite direction, gradually forcing companies to shift from semi-annual to quarterly reporting during the 2000s.

Companies that want to distance themselves from short-term scrutiny should instead stop publicly projecting the next quarter's earnings, Pozen added.

Investors have mostly argued for more transparency, while some executives say too-frequent reporting creates an unhealthy focus on short-term targets.

And he said, the SEC already had implemented some regulatory changes and continued to consider others that "encourage long-term capital formation while preserving and, in many instances, enhancing key investor protections".

"My comments were made in that broader context, and included a suggestion to explore the harmonisation of the European system and the USA system of financial reporting".

He would need to draft a proposed rule-change which would then be put to an industry consultation during which investors, companies, exchanges, pension funds and public interest groups would likely bombard the SEC with information.

Quarterly earnings guidance is used by Wall Street and City analysts to build their earnings estimates and gauge company performance against these figures.

Related news