Securities and Exchange Chairman Jay Clayton made no promises Friday afternoon in responding to President Trump’s abrupt request in the morning to consider allowing publicly-traded companies to report earnings semi-annually rather than quarterly, and instead danced around the subject in a statement.
“The President has highlighted a key consideration for American companies and, importantly, American investors and their families — encouraging long-term investment in our country,” Clayton said in the press release.
In response to Trump’s specific request, Clayton noted that his agency has explored ways to enhance long-term thinking at companies, and that a subdivision is studying the frequency of reporting. But he steered clear of any making any specific commitments.
Trump had tweeted earlier in the day that “top business leaders” had told him that a semi-annual reporting system would allow for better jobs in the U.S., and that he had asked the SEC to study the possibility of ending quarterly reporting.
The tweet put Clayton in an awkward situation. As an independent regulator, he is not supposed to take direction from the president.
Clayton did not acknowledge any previous communication with the White House on the topic in his statement. Instead, he simply said that the agency always welcomes input from the public.
Some business leaders and politicians – most notably Hillary Clinton in her 2016 campaign for president – have argued that businesses and investors suffer from “short-termism” in seeking quick profits, and that the government should induce them to focus more on long time horizons.
