By President Donald Trump on Wednesday issued a sharp warning to U.S. defense contractors, declaring he would not permit stock dividends, share buybacks, or executive compensation above $5 million until the industry resolves persistent delays in producing and maintaining military equipment.
In a lengthy post on Truth Social, Trump accused major defense firms of prioritizing shareholder returns and what he described as excessive executive pay over investments in production capacity and timely delivery of weapons systems. “This situation will no longer be allowed or tolerated,” he wrote, arguing that funds currently directed toward dividends and buybacks should instead be used to construct modern manufacturing facilities and improve repair and maintenance operations.
“Defense Companies are not producing our Great Military Equipment rapidly enough and, once produced, not maintaining it properly or quickly,” Trump stated. He demanded that executives build “NEW and MODERN Production Plants” for both current and future systems and insisted that maintenance standards be “spot on, on time.”
The president’s remarks follow earlier administration signals in late 2025 pointing toward possible executive action targeting contractors that fall behind schedule or exceed cost projections. Several flagship programs—including the F-35 fighter jet produced by Lockheed Martin and the Sentinel intercontinental ballistic missile system led by Northrop Grumman—have experienced years-long delays and multibillion-dollar cost overruns.
Industry data cited by the administration highlights the scale of the issue. Between 2021 and 2024, leading contractors—including Lockheed Martin, RTX, Northrop Grumman, and General Dynamics—spent a combined $89 billion on dividends and share repurchases, exceeding their combined free cash flow of $64 billion. Executive compensation at these firms frequently ranges from $15 million to $50 million annually, far above Trump’s proposed $5 million cap.
Markets reacted quickly. Shares of Lockheed Martin, Northrop Grumman, and General Dynamics each fell roughly 2 percent following the announcement.
Trump framed the directive as a national security imperative, arguing that redirecting capital from Wall Street to factory floors would strengthen U.S. military readiness over the long term. “MILITARY EQUIPMENT IS NOT BEING MADE FAST ENOUGH! It must be built now with the Dividends, Stock Buybacks, and Over Compensation of Executives,” he wrote.
The move marks a notable escalation in White House pressure on the defense industry, which depends heavily on federal contracts amid rising global tensions. Analysts cautioned that it remains unclear how the administration would enforce such limits, but said the statement signals a shift toward prioritizing industrial capacity over short-term financial returns.
No immediate responses were issued by major contractors, including Lockheed Martin, Boeing, RTX, Northrop Grumman, or General Dynamics at the time of this writing.
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