On May 5, 2026, the Securities and Exchange Commission (SEC) announced proposed rule and form amendments that would allow public companies currently required to file quarterly reports on Form 10-Q to elect to file semiannual reports on the new Form 10-S. As proposed, it would require the same content and financial requirements as the 10-Q, but would take a longer period of six months.
The timing of a final rule is unclear, but SEC rulemaking often takes several months after the comment period ends (in this case, July 6, 2026). If the final rule is adopted by the end of 2026, companies may adopt semi-annual reporting beginning in fiscal year 2027.
Companies that choose this approach file one semi-annual report and one annual report for each financial year. If a company chooses this approach, it may still release quarterly financial results or make other voluntary disclosures. This proposal does not eliminate current Form 8-K reporting requirements, including those that may be triggered by compensation-related or other material events.
Although this proposal is primarily structured as a disclosure reform initiative, it has potential implications beyond reporting mechanisms. Notably, the SEC briefly acknowledged that companies may need to review existing agreements, such as incentive-based executive compensation arrangements that rely on quarterly performance metrics. Although this proposal does not currently require any changes to the compensation structure, we anticipate that the compensation disclosure requirements of Section 402 will likely be updated and require significant adjustments in the future.
Potential general impact
We expect there to be variation in the selection of semi-annual reports. Companies with stable business models may actively choose this system, while companies with close investor scrutiny may continue to report quarterly. Most companies are likely to maintain a quarterly pace of internal controls regardless of changes in external reporting. Investor expectations ultimately drive reporting frequency outcomes, with market practices proving to be more influential than regulatory minimums.
The Committee should also understand that the transition to semiannual SEC reporting raises practical issues regarding insider trading windows and stock repurchase activities that depend on whether companies and their insiders possess material nonpublic information (MNPI).
Under current practice, companies typically close the trading window before quarterly results and reopen the trading window immediately after issuance of the earnings release, based on the view that the earnings release conveys the most important financial information to the market. Subsequently filed Forms 10-Qs are more detailed but generally do not introduce material new information that independently affects the transaction decision.
If a company moves to semi-annual reporting while continuing to issue quarterly results, the absence of a Form 10-Q in the first and third quarters may not, in and of itself, require a fundamental change in the timing of trading windows or the implementation of stock repurchases. However, the analysis can be more nuanced because Form 10-Q includes a broader set of disclosures beyond key financial results that may constitute MNPI, such as updates to risk factors, legal proceedings, and other business developments.
Unless the information previously disclosed in the 10th quarter was conveyed through earnings documents or other public disclosures, the board may need to reassess whether insiders can trade appropriately or proceed with share repurchases after the earnings release.
In that case, companies may need to extend the blackout period or strengthen their disclosure practices to ensure all material information is made public before trading resumes.
Potential impact on compensation programs and governance
design
In reality, executive compensation programs may be tied directly or indirectly to quarterly performance cycles. Annual incentive plans may be informed by quarterly pacing, interim performance reviews, or explicit quarterly amendments. As long as companies choose semi-annual reporting, the external visibility of quarterly checkpoints is likely to decrease, even if the company continues to track performance internally. This transition could reduce reliance on quarterly adjustments in annual incentive programs.
On the other hand, the direct impact on TSR-based compensation designs and other long-term compensation designs is likely to be limited. This is because they already rely on multi-year performance and broader market data.
contractual promise
The SEC noted that companies considering this change may need to reconsider existing contractual commitments, such as incentive-based executive compensation arrangements that may be tied to quarterly performance metrics, reporting, and results (although this is rare in our experience). Companies that do not have the discretion to make unilateral changes may need to renegotiate such provisions.
disclosure
The proposal could also affect how companies that eliminate quarterly reporting communicate performance-based pay. As required filings decrease, proxy disclosures may rely more heavily on annual or multi-year statements, and additional supplemental disclosures may be required to maintain clarity. Additionally, investor engagement is likely to become more focused on proxy cycles and major disclosure events.
What the compensation committee can do now
Overall, it is unlikely that any recently proposed changes will result in immediate compensation-related action until larger compensation reforms are formally proposed.
Companies considering a change to semi-annual reporting will need to weigh the pros and cons of reducing reporting frequency and take inventory of programs that rely on quarterly performance, including both formal structures and informal practices. Compensation-related shareholder engagement strategies must also align with changes in reporting frequency.
As always, it is important to review long-term incentive programs to ensure they are aligned with sustainable value creation. Disclosure strategies should also be evaluated to ensure pay-for-performance narratives remain clear even when intermediate data points are few.
About Perlmeyer
Pearl Meyer is a leading advisor to boards and senior executives who helps organizations build, develop and reward high-performing leadership teams that drive long-term success. Our strategy-driven compensation and leadership consulting services serve as a powerful catalyst for value creation and competitive advantage by addressing the critical link between people and performance. For more information about Pearlmeyer, please visit https://pearlmeyer.com/.
