Key Takeaways
- • Robert C. Pozen, former Fidelity vice chairman and MIT Sloan senior lecturer, argues in an October 30, 2026 Barron's-style commentary that the SEC's May proposal to replace three quarterly 10-Qs with a single semiannual report on a new Form 10-S is the wrong remedy for short-termism.
- • Pozen cites the 1955-1970 U.S. semiannual period and U.K. experiments (quarterly mandate 2007, repealed 2014) and says his research with Suresh Nallareddy and Shivaram Rajgopal on roughly 500 companies found no significant change in capital spending or R&D after the mandate shifts.
- • Pozen says quarterly reporting is correlated with a lower cost of equity capital, and warns that optional semiannual filing would fragment disclosure, leaving investors comparing peers on different calendars.
- • Pozen says the real culprit is quarterly EPS guidance, and proposes a three-point agenda: disclose guidance hit rates, speed up and streamline the 10-Q, and require explanation of large share buybacks.
Summary
Robert C. Pozen, a distinguished senior lecturer at MIT Sloan and former vice chairman of Fidelity Investments and executive chairman of MFS Investment Management, argues that the Securities and Exchange Commission should abandon its May 2026 proposal to let public companies file semiannual reports on a new Form 10-S in place of three quarterly 10-Qs. The proposal is intended to address short-termism, the concern that quarterly reporting pushes executives to prioritize near-term earnings over long-horizon investment. Pozen notes that the SEC received overwhelmingly negative comments from individuals, companies and trade organizations, and that the agency, which now has one Republican commissioner and a Republican chair, still appears receptive to the idea.
Pozen points to historical and international evidence. The SEC required semiannual reporting from most public companies in 1955 but reverted to quarterly reporting in 1970 after investors demanded more frequent information. Subsequent analysis, he says, found that the cost of equity capital for U.S. companies fell as reporting moved from semiannual to quarterly. In the U.K., quarterly reporting was mandated in 2007 and dropped in 2014. In a study with Suresh Nallareddy and Shivaram Rajgopal of roughly 500 companies that began quarterly reporting in 2007, Pozen reports no significant change in capital spending or research budgets, and no evidence that firms moving to semiannual reporting after 2014 invested more than those that stayed quarterly. He adds that Europe's broader shift to semiannual reporting created an information vacuum, with analysts pricing European stocks off U.S. peers' quarterly results.
Pozen argues that the proposed optional approach is worse than a mandate, because it would produce a fragmented disclosure environment in which competitors report on different calendars. He also notes the SEC acknowledges "hybrid reporters" that will keep quarterly earnings releases and calls at institutional investors' insistence, meaning they would give up the 10-Q's financial statements, footnotes, management commentary and CEO-CFO certifications. He flags that the six-month gap between a 10-K and a 10-S would extend insider blackout periods and the window for possible misuse of material nonpublic information.
In Pozen's view, the true driver of short-termism is quarterly EPS guidance, which he says a majority of American companies issue and manage the business to meet. He proposes a three-point agenda: require companies that issue guidance to disclose how often they meet it and stop tying bonuses to guidance; shorten and accelerate the 10-Q, which is currently filed seven to 10 days after the earnings press release, with a streamlined form filed the same day; and require more explanation of large share buybacks in the context of capital investment strategy. Pozen concludes that the 2026 information environment, shaped by algorithmic trading and a 24-hour news cycle, makes timely quarterly disclosure more important, not less.
Pozen points to historical and international evidence. The SEC required semiannual reporting from most public companies in 1955 but reverted to quarterly reporting in 1970 after investors demanded more frequent information. Subsequent analysis, he says, found that the cost of equity capital for U.S. companies fell as reporting moved from semiannual to quarterly. In the U.K., quarterly reporting was mandated in 2007 and dropped in 2014. In a study with Suresh Nallareddy and Shivaram Rajgopal of roughly 500 companies that began quarterly reporting in 2007, Pozen reports no significant change in capital spending or research budgets, and no evidence that firms moving to semiannual reporting after 2014 invested more than those that stayed quarterly. He adds that Europe's broader shift to semiannual reporting created an information vacuum, with analysts pricing European stocks off U.S. peers' quarterly results.
Pozen argues that the proposed optional approach is worse than a mandate, because it would produce a fragmented disclosure environment in which competitors report on different calendars. He also notes the SEC acknowledges "hybrid reporters" that will keep quarterly earnings releases and calls at institutional investors' insistence, meaning they would give up the 10-Q's financial statements, footnotes, management commentary and CEO-CFO certifications. He flags that the six-month gap between a 10-K and a 10-S would extend insider blackout periods and the window for possible misuse of material nonpublic information.
In Pozen's view, the true driver of short-termism is quarterly EPS guidance, which he says a majority of American companies issue and manage the business to meet. He proposes a three-point agenda: require companies that issue guidance to disclose how often they meet it and stop tying bonuses to guidance; shorten and accelerate the 10-Q, which is currently filed seven to 10 days after the earnings press release, with a streamlined form filed the same day; and require more explanation of large share buybacks in the context of capital investment strategy. Pozen concludes that the 2026 information environment, shaped by algorithmic trading and a 24-hour news cycle, makes timely quarterly disclosure more important, not less.
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