Jamie Dimon throws support behind changes to quarterly reporting

JPMorgan Chase chief executive Jamie Dimon has voiced support for a potential shift away from mandatory quarterly earnings reports, aligning himself with a growing cohort of business leaders and investors who argue that the current system places undue pressure on companies and their executives.

Speaking on Bloomberg TV, Dimon said he would welcome changes to US Securities and Exchange Commission requirements that could allow companies to report earnings less frequently.

“The bigger problem wasn’t just reporting quarterly,” Dimon said. “It was forecasting, where CEOs get their back up against a wall. They have to meet these things – earnings – and then they start doing dumb stuff to meet earnings, and that kind of public pressure.”

Dimon's comments echo those from climate-focused institutional investors, who were perhaps the most unlikely cohort to express support for the measure recently re-floated by President Donald Trump. As reported by Reuters, some of those voices see a potential shift away from short-termism as a path towards what they see as a smart pivot to sustainability.

"We want companies to consider the material impact of their strategies on a long-term view and plan accordingly to mitigate any sustainability-related risks, so if moving away from quarterly reporting can help achieve this without impacting transparency and disclosure then it could be positive," said Nick Duncan, Sustainable Investment director at investor Aberdeen, told Reuters. 

"[That's] especially if the reduced quarterly reporting burden encouraged companies to maintain or enhance the current level of sustainability-related reporting," Duncan said.

Some corporate leaders have also been outspoken in their support for the proposed change. Vicki Hollub, CEO of Occidental Petroleum – whose chemical division was snapped up by Berkshire Hathaway in a stunning $9.7-billion deal last week – said she would “love” to see the quarterly reporting requirement scrapped.

“What I find is that reporting on a quarterly basis, sometimes it’s difficult for us to be able to share with our shareholders and our potential investors the complete story of a project as we’re kind of in the middle of figuring something out when the quarter happens,” Hollub told Bloomberg separately.

Dimon noted that even if the SEC were to relax the rules, JPMorgan would likely continue to update investors every three months, but with “much less stuff.” He described the current quarterly reporting mandate as “a small part of a much bigger problem,” pointing to what he called “endless rules” that make it difficult for companies to go public.

The debate over quarterly reporting has gained new momentum following the SEC’s recent pledge to fast-track the proposal, which would give companies the option to report on a semi-annual basis rather than every three months. Paul Atkins, chairman of the SEC, said the agency would “remove its thumb from the scales."

“Giving companies the option to report semi-annually is not a retreat from transparency,” Atkins wrote in a Financial Times column. “It is time for the SEC to remove its thumb from the scales and allow the market to dictate the optimal reporting frequency based on factors such as the company’s industry, size and investor expectations.”

Critics, however, warn that less frequent reporting could reduce transparency and make it easier for companies to obscure bad news. Trump's call for change in September was met with resistance from voices across Wall Street, arguing it could lead to greater uncertainty as investors and analysts would play a longer waiting game between company's earnings reports.

Brian Nick, head of portfolio strategy at Newedge Wealth, said that while the goal is to encourage long-term thinking, “it would increase uncertainty in the equity market and could lead to a lowering of valuations.”