ExxonMobil CFO pens letter supporting SEC proposal

Some of the messages are simple: “Keep it QUARTERLY!!”

When the Securities and Exchange Commission released its proposal to make quarterly reporting optional, it included a standard but easily overlooked tidbit: There was going to be a public comment period.

For the gossip-inclined among us, that should’ve been the real news. Give. Us. Drama!!

When the proposal was announced in May, the comment period was slated to last for 60 days. Now, we’re getting a sense of what those comments look like, and admittedly, most don’t sound like a catty Succession monologue. They sound more like: “Keep it quarterly” and “Keep it quarterly.”

Nearly all (99%) of letters submitted through July 3 were from those who opposed the SEC’s proposal, according to a tracker overseen by Ohio State University accounting professor Tzachi Zach.

One assistant controller told CFO Brew in April that the risk of a negative market reaction outweighs “any benefit we would get from not going through the couple-week process of getting our 10-Q ready to be filed with the SEC.” Moreover, securities experts have cautioned that a change in reporting cadence could put CFOs at a greater risk of violating disclosure laws.

But ExxonMobil’s SVP and CFO, Neil Hansen, submitted comments to the SEC that go against the grain of those in opposition.

In one of the more comprehensive comment letters, Hansen outlined Exxon’s largely positive stance on the proposed change.

“ExxonMobil is supportive of the Commission’s semiannual reporting proposal and appreciates its pragmatic approach in retaining the existing interim reporting framework,” he wrote. “We believe it represents a thoughtful reassessment of long-standing reporting practices in the context of currently available information channels, market behavior, and investor expectations, without compromising long-standing and important investor protections.”

Additionally, Hansen addressed some of “the overarching themes that we believe are central to the success of this proposal.”

For instance, he stressed ExxonMobil’s support for “optional rather than mandatory” semiannual reporting.

“An optional framework appropriately recognizes that companies differ in size, maturity, industry, complexity, investor base, geographic footprint, and disclosure practices,” he said, adding that Exxon believes “investor and issuer considerations, rather than regulatory mandate, should largely determine the cadence and format of interim reporting.”

He also said Exxon does “not believe a move to semiannual reporting would result in a reduction of material or timely information available to investors.”

“Feedback from our investors and others in the financial community indicates that they increasingly rely on earnings releases, webcasts, investor presentations, Form 8-K filings, and company investor relations websites, rather than Form 10-Q itself, as their primary sources of issuer information,” he said.

“This broader, more dynamic disclosure ecosystem currently provides investors with continuous access to material developments,” he continued. “The proposed framework appropriately recognizes that the purpose of periodic reporting—maintaining reasonably current, publicly available information—is now achieved through multiple channels that are more user-friendly and often more effective.”