CEOs Steer Clear of Political Discussions During Earnings Season

As the United States gears up for the high-stakes 2024 presidential election, a remarkable trend has emerged among corporate leaders during October’s earnings calls: a conspicuous avoidance of all things political. This pattern has become so pronounced that observers are noting it exceeds levels seen in past election cycles.

A review by Yahoo Finance revealed that major corporations, including heavyweights like Amazon (AMZN), Bank of America (BAC), and Microsoft (MSFT), made no reference to the upcoming election during their conference calls. Notably, even brands that have recently faced political scrutiny, such as McDonald’s (MCD), chose to skirt the conversation. During a call, JPMorgan Chase (JPM) CEO Jamie Dimon was directly asked about his conversations with presidential campaigns and his decision to withhold public endorsements. He responded curtly: “I’m not going to talk about who I’m speaking to,” emphasizing, “I’m not going to get into politics on this particular call.”

Heightened Caution and Election Anxiety

This exceedingly cautious approach from CEOs is part of a broader trend that has seen corporate executives avoiding political discourse this earnings season. Scott Krisiloff, founder and editor of The Transcript, noted that the current political climate, particularly with the heated contest between former President Donald Trump and Vice President Kamala Harris, is likely creating a “play not to lose” mindset among CEOs. “There is so much visceral emotion,” he stated, suggesting that the anxiety around the election may be more palpable than ever.

Company executives are navigating choppy waters, particularly given Trump’s history of aggressive tactics toward businesses he perceives as standing against him. For instance, Trump threatened heavy tariffs against Deere (DE) if the tractor manufacturer moved operations to Mexico. Such dynamics contribute to a palpable tension within the corporate world regarding political engagement, where sides on both ends of the spectrum can impose significant repercussions.

Is Politics Worth the Discussion?

In an atmosphere where political discussion could be deemed risky, some executives are questioning the relevance of political events altogether. Larry Fink, CEO of BlackRock (BLK), expressed such frustration in a recent conference, stating, “I’m tired of hearing this is the biggest election in your lifetime,” implying that the implications of elections tend to fade over time. He further added that, historically, election outcomes don’t drastically shift the landscape for markets.

Others, like Rob Berkley, president and CEO of the W. R. Berkley Corporation (WRB), echoed these sentiments, suggesting that regardless of who wins the election, each candidate is likely to exacerbate the national debt. He noted that discussions around growing deficits should be on the minds of investors, emphasizing the long-term financial implications that transcends political affiliation.

Minimal Political Commentary During Earnings Calls

In light of these considerations, it’s no surprise that discussions surrounding the election are sparse during earnings calls. Krisiloff pointed out that CEOs “have something like Larry Fink’s thing in the back of their mind,” affecting their reluctance to engage in political discourse. Even Fink largely abstained from political commentary during his own earnings call, merely highlighting his view that next year post-election would present fantastic opportunities for BlackRock.

This represents a notable shift in behavior for a person previously engaged in political discussions about crucial topics such as environmental, social, and governance (ESG) responsibilities. In a significant turn of events, Fink has indicated an intent to avoid even mentioning ESG, another term he believes has been “weaponized” in political discourse.

A Few Exceptions to the Rule