WASHINGTON, DC — President Donald Trump escalated his public confrontation with major U.S. defense contractors on Wednesday, threatening to block stock buybacks, dividends, and high executive compensation unless companies sharply increase weapons production and investment in new facilities.
In a series of posts on Truth Social, Trump accused defense firms of prioritizing shareholder payouts over delivering military equipment in a timely manner. He said buybacks and dividends were coming “at the expense and detriment of investing in Plants and Equipment,” adding that executive compensation should be capped at $5 million until production problems are resolved. Trump demanded companies build new manufacturing facilities to speed delivery and maintenance of weapons for U.S. forces and allies.
Following the remarks, shares of major contractors including Lockheed Martin, General Dynamics, Northrop Grumman, and RTX Corp. fell, reflecting investor uncertainty over how the administration might enforce the threats. Trump did not outline a specific legal mechanism, and the White House declined to clarify how such restrictions would be implemented.
The comments come as the administration pursues sweeping changes to Pentagon procurement, with Defense Secretary Pete Hegseth pushing reforms aimed at accelerating weapons acquisition. Trump has also floated a dramatic increase in the Pentagon’s annual budget, even as he criticizes what he describes as excessive profits and long production delays across the defense sector.
Industry analysts and legal experts questioned whether the president can directly dictate compensation and financial decisions typically controlled by corporate boards, though some suggested pressure could be applied through federal contracting requirements.
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