President Trump issued a stern warning to the defense industry on Wednesday, demanding companies halt dividends, stock buybacks, and excessive executive compensation. He said that the proceeds should instead be used for new manufacturing plants, equipment production, and innovation.
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“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,” Trump said in a Truth Social post.
Defense Stocks Dip as Trump Targets Executive Pay
Defense companies, including Lockheed Martin (LMT), RTX Corporation (RTX), and L3Harris Technologies (LHX), fell slightly following the announcement.
Trump added that defense executives will have their “exorbitant and unjustifiable” annual compensation capped at $5 million until the issue is solved. It isn’t immediately clear if this figure includes stock and option rewards. In addition, he discouraged defense companies from using government subsidies and borrowed capital to build military equipment.
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