President Donald Trump warned major U.S. defense contractors on Wednesday he will block dividend or stock buybacks and curb executive compensation until companies ramp up weapons production and invest more heavily in modernization and manufacturing capacity.
In a post on his Truth Social platform, Trump said he “will not permit” defense firms to issue dividends or conduct stock buybacks until they address what he described as chronic delays in producing and maintaining military equipment. He argued that defense companies have prioritized shareholder returns over expanding factories and improving output, even as global security threats mount.
“All United State Defense Contractors, and the Defense Industry as a whole, BEWARE: While we make the best Military Equipment in the World (No other Country is even close!), Defense Contractors are currently issuing massive Dividends to their Shareholders and massive Stock Buybacks, at the expense and detriment of investing in Plants and Equipment,” Trump wrote on Truth Social. “This situation will no longer be allowed or tolerated!”
The defense sector has long been criticized as slow and wasteful, with many prime contractors missing deadlines and exceeding budgets while relying on taxpayer funding. Lockheed Martin’s contract for the F-35 multi-role fighter, for instance, is over budget by $165 billion and roughly a decade late on deliveries.
The Government Accountability Office found in 2025 that Boeing spent nearly a billion dollars over eight years on the Orca Extra Large Unmanned Undersea Vehicle program, despite the program never reaching full production.
Trump also took aim at executive compensation, calling pay packages at major defense contractors “exorbitant and unjustifiable.”
“From this moment forward, these Executives must build NEW and MODERN Production Plants, both for delivering and maintaining this important Equipment, and for building the latest Models of future Military Equipment,” Trump wrote. “Until they do so, no Executive should be allowed to make in excess of $5 Million Dollars which, as high as it sounds, is a mere fraction of what they are making now.”
The president singled out defense firm Raytheon in a subsequent post, saying he had been informed by the Department of War that the company was “the least responsive to the needs of the Department of War, the slowest in increasing their volume, and the most aggressive spending on their Shareholders rather than the needs and demands of the United States Military.”
“Raytheon seems to think this is the Biden Administration, and this is ‘business as usual,’ IT’S NOT! Either Raytheon steps up, and starts investing in more upfront Investment like Plants and Equipment, or they will no longer be doing business with Department of War,” Trump wrote.
Shares of Raytheon, General Dynamics, Lockheed Martin, and Northrop Grumman each slid following the president’s comments.
Frustrations with the contracting process prompted War Secretary Pete Hegseth to sign a batch of memos in November proposing multiple procurement reforms, including potential penalties for contractors behind on their orders.
Despite ongoing delays, defense firms have continued to win large federal contracts. Lockheed Martin announced a deal with the Pentagon on Tuesday to triple production of its Patriot air-defense missiles, after also winning a $9.8 billion contract in September to produce nearly 2,000 interceptors.
The push to limit defense companies’ ability to repurchase stock and pay executives high salaries has the support of Democrats, including Sen. Elizabeth Warren of Massachusetts.
“Contractors should be prioritizing investments in research, development, and their workforce to help strengthen America’s innovation. Shortfalls in defense contractors’ workforce increase delays and spending for DoD,” Warren wrote to Treasury Secretary Scott Bessent in December with Democrat Rep. Chris Deluzio of Pennsylvania.
It remains unclear under what legal authority such restrictions would be imposed. The White House did not immediately respond to the Daily Caller News Foundation’s request for comment.
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