Trump warns defense CEOs to ‘BEWARE’ of coming limits on share buybacks, salary

WASHINGTON — President Donald Trump issued a sharp warning to defense firms today that he plans to prohibit the companies from making share repurchases and paying dividends to shareholders, as well as place restrictions on executive compensation, unless companies make investments to modernize weapons production facilities.

“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. This situation will no longer be allowed or tolerated!” Trump said today in a post on his Truth Social media platform.

“Therefore, I will not permit Dividends or Stock Buybacks for Defense Companies until such time as these problems are rectified — Likewise, for Salaries and Executive Compensation. MILITARY EQUIPMENT IS NOT BEING MADE FAST ENOUGH!” he said.

Trump’s statements come on the heels of numerous media reports in December that the administration plans to issue an executive order that could curtail defense company share buybacks, dividends and executive compensation. But in the absence of that order, the president’s post is light on specific information on how the administration would implement these new restrictions.

For instance, Trump stated that no defense CEO should be permitted to make more than $5 million, but its unclear whether stock options or other bonuses would figure into that calculation — much less under what mechanism that government could enforce the cap. And while Trump lists several actions he’d like to see from defense companies — namely building new production plants and speeding up maintenance and repair — his post does not list specific metrics that companies must meet to regain the ability to buy back stock, increase executive compensation or pay dividends.

RELATED: Defense companies keep up momentum on share repurchases despite Navy leader’s criticism

Enacting an executive order “would appear to fit with the Administration’s comments about taking a more activist approach to publicly traded defense cos., but we believe there would be a host of regulatory and legal issues implementing it,” Roman Schweizer, an analyst with TD Cowen, wrote in a letter to investors in December when reports of an impending EO first broke.

“To us, the first question would be defining a ‘defense company,’” he said, noting that major companies like Amazon and Microsoft do business with the military and US intelligence agencies.

Breaking Defense reached out to the top six publicly-traded defense companies for comment. RTX, Boeing, L3Harris and General Dynamics declined to comment. Lockheed Martin and Northrop Grumman did not immediately respond to the request for comment.

Defense Secretary Pete Hegseth expressed support for the pending restrictions, posting a screencap of the Truth Social post on X and adding the “100” emoji.