President Donald Trump on Wednesday issued a sweeping warning to U.S. defense contractors, accusing the industry of prioritizing shareholder payouts and executive compensation over the rapid production and maintenance of military equipment.
In a post on his Truth Social platform, Trump said defense companies have been issuing "massive dividends" and carrying out large stock buybacks while failing to invest adequately in new factories, equipment, and production capacity.
While praising U.S. military hardware as "the best in the world," Trump also took direct aim at executive compensation in the defense sector, calling pay packages "exorbitant and unjustifiable" given what he described as sluggish delivery schedules and poor maintenance performance.
"This situation will no longer be allowed or tolerated," Trump wrote, signaling a more aggressive posture toward an industry that relies heavily on federal contracts.
He proposed capping executive compensation at $5 million annually until companies build "new and modern production plants" capable of producing and maintaining current equipment while developing next-generation military systems.
"No executive should be allowed to make in excess of $5 million," Trump wrote, describing the figure as "a mere fraction" of current compensation levels.
In addition to compensation limits, Trump said he would prohibit defense contractors from issuing dividends or engaging in stock buybacks until they reinvest profits into expanding and modernizing production and maintenance facilities.
He argued that companies should use internal funds rather than borrowing from financial institutions or relying on additional government support to meet defense needs.
Trump also criticized what he called slow and inadequate maintenance and repair services for military equipment already sold, demanding that upkeep be "spot on, on time."
He framed faster maintenance and production as matters of national security, stressing the urgency of equipping both U.S. forces and allies.
While the proposal would represent a significant shift in how the federal government regulates defense contractors, Trump argued that the approach would ultimately benefit both shareholders and executives by strengthening the country's industrial base.
"Longer term, this is good for both Executives and Shareholders," he wrote, adding that the changes would be "GREAT for our Country."
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