Overview
- In a Truth Social post, President Trump said he will not permit defense companies to issue dividends or conduct stock buybacks until they speed production and improve maintenance, urging investment in new and modern plants.
- He proposed capping executive compensation at $5 million annually for defense-industry leaders until production and sustainment concerns are addressed.
- Shares of major contractors fell following the announcement, with Northrop Grumman down more than 5% and Lockheed Martin nearly 5% by midafternoon, alongside declines in RTX and General Dynamics.
- It remains unclear how the restrictions would be enforced, and reports citing unnamed sources said the administration is weighing an executive order.
- The push follows persistent warnings about slow procurement and rising costs, including GAO findings that major programs take about 11 years to deliver capability and Pentagon complaints about overdue, over-budget systems.