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Good morning. This week, the U.S.\u00a0Securities and Exchange Commission addressed a long-running debate on Wall Street: Are quarterly earnings reports helping investors\u2014or fueling short-term earnings management?<\/p>\n
On Tuesday, the agency announced a proposed rule and form amendments that would allow semiannual reports to satisfy interim obligations under federal securities laws. The proposal is not final; comments will remain open until 60 days after Federal Register publication.<\/p>\n
\u201cPublic companies have an obligation under the federal securities laws to provide information that is material to investors,\u201d SEC Chairman Paul S. Atkins said in a statement. \u201cYet, the rigidity of the SEC\u2019s rules has prevented companies and their investors from determining for themselves the interim reporting frequency that best serves their business needs and investors.\u201d If adopted, the changes would provide \u201cincreased regulatory flexibility in this regard,\u201d he said.<\/p>\n
The SEC says the change would be optional. A spokesperson told me that companies would weigh peer comparability, analyst requests, and investor expectations when deciding whether to opt in.<\/p>\n
Kristina Wyatt, EVP and general counsel at The Conservation Fund and a former SEC senior counsel, told me that she sees both sides.<\/p>\n
\u201cOn the one hand, public companies are so focused on meeting quarterly expectations that that can foster short-term thinking,\u201d Wyatt said. \u201cThe burdens on companies from the quarterly reporting cycles are significant and that may, in part, feed into the flight to the private markets that we\u2019ve seen over the last 20 years in this country.\u201d However, she added, \u201cinvestors need to have equal and fair access to material information about companies to help inform their investment decisions and to foster accurate pricing under the Efficient-Market Hypothesis.\u201d<\/p>\n
Wyatt said quarterly reporting and Form 8-K disclosures support transparency and informational parity. If semiannual reporting becomes optional, regulators should scrutinize disclosures between reports, potentially strengthening Form 8-K and enforcing Regulation FD to prevent selective disclosure.<\/p>\n
Wyatt sees three risks: greater informational asymmetry and reduced pricing efficiency; higher risk premiums and cost of capital; and more reliance on third-party information, which could reduce accuracy and accountability. With AI spreading third-party data, company-certified filings may become more important.<\/p>\n
In a Fortune opinion piece, Kunal Kapoor, CEO of Morningstar, argues semiannual reporting could reduce burdens, especially for smaller firms, and make public markets more attractive if disclosure remains strong. He says incentives drive short-termism more than reporting frequency.<\/p>\n
Meanwhile, Shivaram Rajgopal, a professor of accounting and auditing at Columbia Business School, is more skeptical. \u201cIn the U.K., when something similar was enacted, very few firms stopped quarterly reporting in the short run,\u201d Rajgopal said. \u201cBut over the period of a decade or so, everyone stopped reporting quarterly.\u201d<\/p>\n
He argues that relying on Form 8-K disclosures misses the value of interim financial statements, which translate events into concrete financial metrics. \u201cForms 10-Q serve that market need,\u201d he said. Potential downsides include more insider activity, greater volatility and surprises, and reduced analyst coverage. Rajgopal also questions whether the proposal addresses short-termism. \u201cThis is a solution looking for a problem,\u201d Rajgopal said. \u201cMyopia over three months, the intended target, will simply be myopia over six months. What exactly have we accomplished?\u201d<\/p>\n
The debate will continue. <\/p>\n
Have a good weekend.<\/p>\n
Sheryl\u00a0Estrada
sheryl.estrada@fortune.com<\/p>\n
Leaderboard<\/p>\n
Fortune 500 Power Moves<\/p>\n
Theodora “Doretta” Mistras, CFO of\u00a0Viatris Inc. (No. 298), a global pharmaceutical company, will depart the company for a new professional opportunity. Paul Campbell, currently chief accounting officer and corporate controller, will serve as interim CFO, effective May 8, while the company conducts its search for a permanent successor. Mistras will remain at Viatris until May 22, for a transition period.<\/p>\n
Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 company C-suite shifts\u2014see the most recent edition.<\/p>\n
More notable moves this week:\u00a0<\/p>\n
Michelle Hook was appointed CFO of Shake Shack Inc. (NYSE: SHAK), effective May 11. Hook brings more than two decades of experience in the restaurant industry. She joins Shake Shack from Portillo\u2019s, where she served as CFO beginning in December 2020. In that role, she helped take the company public in 2021. Previously, Hook spent more than 17 years at Domino\u2019s Pizza, Inc., where she most recently served as VP of finance for global FP&A and investor relations, and held various accounting and finance leadership positions.<\/p>\n
Chris Monroe was appointed EVP and CFO of CEC Entertainment, LLC, the parent company of Chuck E. Cheese and Peter Piper Pizza. Monroe brings more than 30 years of experience across the restaurant, aviation, and defense sectors. Monroe most recently served as CFO of Texas Roadhouse. Before that, Monroe spent more than three decades at Southwest Airlines, ultimately serving as SVP of finance, treasurer, and sustainability.\u00a0<\/p>\n
Paul DiCicco\u00a0was appointed EVP, CFO, and treasurer of\u00a0\u00a0Madison Square Garden Sports Corp.\u00a0(NYSE: MSGS), effective May 11. DiCicco has 30 years of experience. He joins MSG Sports from Stephen Gould Corporation, where he served as CFO. Before that, DiCicco was at Harris Blitzer Sports and Entertainment, where he served as SVP and corporate controller.\u00a0 DiCicco\u2019s experience also includes various senior finance and accounting roles at both public and private companies in the U.S. and Asia.<\/p>\n
Jennifer Kartychak was promoted to CFO of Worksport Ltd. (Nasdaq: WKSP) a manufacturer of hybrid and clean energy solutions, effective May 1. Kartychak has worked with Worksport since August 2023 through Arend Advisory Group, LLC, an entity wholly owned by her, before joining the company full-time as VP of finance on Jan. 1, 2026. Kartychak brings over 25 years of accounting experience.\u00a0<\/p>\n
Michael Mioska\u00a0was appointed CFO of\u00a0Birchtech Corp.\u00a0(NYSE American: BCHT), an activated carbon technology provider. Mioska has over 20 years of accounting, audit, and financial reporting experience. Mioska has been an independent consultant providing finance, financial reporting, and M&A advisory-related services to a range of public companies since 2021, including Birchtech since 2023. Before that, Mioska worked at a public accounting firm in Vancouver, BC providing similar finance services since 2005.<\/p>\n
Jorge Beristain was appointed CFO of Almonty Industries Inc. (Nasdaq: ALM) a global producer of tungsten, effective June 1. Brian Fox has departed from his role as CFO effective immediately. Until Beristain\u2019s start date, Guillaume de Lamaziere, the company\u2019s chief development officer, will serve as interim CFO. Beristain most recently served as VP of finance at Ryerson Holding Corp. He previously served as CFO of Central Steel & Wire Co.\u00a0<\/p>\n
Kari Wimmer\u00a0was appointed CFO of\u00a0Couchbase, Inc., an operational data platform for AI. Wimmer brings more than two decades of experience in corporate finance, M&A, and strategic development. She joins the company from Intellistack, where she also served as CFO. Previously, Wimmer served in senior executive roles at Businessolver, P2 Energy Solutions, and Arrow Electronics.\u00a0<\/p>\n
Big DealPayroll growth in Bank of America customer deposit account data was strong in April, according to a Bank of America Institute report. An estimate of job growth suggests the February\/March rebound strengthened to 1.9% year over year, while growth in unemployment payments eased further.<\/p>\n
However, there were mixed signals beneath the surface. Small business payroll growth was negative in March, even as some sectors, including construction and manufacturing, showed signs of ramping up hiring, according to Bank of America data.<\/p>\n
In addition, a divergence in wage gains persisted. Wage growth remained \u201cK-shaped\u201d in April: After-tax wage growth for higher-income households was 6% year over year, while middle- and especially lower-income households saw much weaker gains.<\/p>\n
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Courtesy of Bank of America Institute<\/p>\n
\u00a0<\/p>\n
Going deeperHere are four\u00a0Fortune\u00a0weekend reads:<\/p>\n
“U.S. Treasury will have to borrow $2 trillion this year just to continue functioning\u2014more than $166 billion every month” \u2014Eleanor Pringle<\/p>\n
“Why CEO Bill McDermott says ServiceNow\u2019s 39% stock crash is Saaspocalypse \u2018nonsense\u2019 and why AI will make it a trillion-dollar company” \u2014Alexei Oreskovic<\/p>\n
“Match Group\u2019s CEO revived a shuttered Tinder internship program for Gen Z\u2014and received over 30,000 applications for just 27 spots” \u2014Emma Burleigh<\/p>\n
“Gen Z just broke the streaming model: A majority subscribe, binge, and cancel over and over, study finds” \u2014Jake Angelo<\/p>\n
Overheard<\/p>\n
“I think it\u2019s important to know that you can have both ambition and limits at the same time. You can go after something fully and still have a say in what it costs you.”<\/p>\n
\u2014Naomi Osaka, a four-time Grand Slam champion, writes in a Fortune opinion piece. Osaka is the ambassador for OLLY\u2019s \u201cDo What Serves You\u201d 2026 campaign in support of Mental Health Awareness Month.<\/p>\n
#quarterly #reporting #helping #investors #hurting #SEC #weighed #inand #debate #isnt<\/p>\n","protected":false},"excerpt":{"rendered":"
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