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The Daily

10-Ks Reaching Novel Length

Chris Gaetano
Published Date:
Jun 2, 2015

Stack of big booksAt 103,484 words and spanning 257 pages, General Electric’s 2014 10-K is longer than Harry Potter and the Sorcerer’s Stone (76,944 words), The Hobbit (95,356 words), Farewell to Arms (101,000 words), and—by far—this blog post (327 words). The Wall Street Journal observes that GE is at the high end of a trend toward longer and longer public company filings stuffed to the gills with increasing numbers of mandated disclosures and other information. According to the Journal, between 2000 and 2013, the average word count of a public company’s 10-K has increased from 30,000 to 42,000, going from the length of Hamlet (30,066 words) to just short of The Great Gatsby (47,000 words). (Though if we’re using books for comparison, maybe it’s not so badInfinite Jest is 543,709 words, Atlas Shrugged is 645,000 words, and Romance of the Three Kingdoms is about 800,000 words.)

The paper also pointed out that the Sarbanes-Oxley Act itself is about 32,000 words.

The move toward heftier reports has been driven partially by regulatory requirements, but also by the complex nature of the financial industry and the various risks to those within it, with an increasingly global scope exacerbating both, the Journal said. Still, it has led companies to wonder what exactly it is investors get from all this information—and whether it’s even useful to have reports that long in the first place. The SEC has been wondering too, which is why chair Mary Jo White has been making disclosure reform a priority, having recently met with major financial industry players to discuss what can be done about ballooning reports, the Journal added.

However, there are some who want companies to go the opposite direction, according to the Journal, and offer even more information about expenses and the profitability of certain business units. Even then, there remains uncertainty about how useful the information that’s already in the reports actually is, making the problem for these investors not so much the length but what is communicated in that length.