Donald Trump has launched an extraordinary attack on America’s biggest defense contractors, threatening to block dividends and stock buybacks unless they speed up weapons production as he prepares a dramatic expansion of US military spending.
In a post on his Truth Social platform, the US president warned defense contractors that he would no longer tolerate what he called slow delivery of military equipment in “troubled and dangerous times.” His comments came ahead of plans to increase the U.S. defense budget by 50 percent by 2027 and increase annual military spending to $1.5 trillion.
Trump accused defense executives of putting shareholder returns and personal compensation above national security and described pay packages across the sector as “exorbitant and unjustified.” He proposed capping executive compensation at $5 million and said companies should redirect capital currently used for dividends and stock buybacks to increasing productive capacity.
“Military equipment is not being manufactured fast enough,” Trump wrote. “It must now be built with dividends, share buybacks and executive overcompensation, rather than borrowing from financial institutions or getting the money from your government.”
The comments represented a rare and direct presidential intervention in capital allocation decisions on Wall Street. In response, US defense stocks initially fell sharply. Shares of Lockheed Martin, Northrop Grumman, RTX and General Dynamics all fell in afternoon trading. The losses were later reduced after Trump reiterated his intention to significantly increase defense spending.
Trump singled out Raytheon, a subsidiary of RTX, accusing it of being “least responsive to the needs of the War Department.” He warned that the company would not be able to carry out any more share buybacks if it wanted government contracts in the future.
The president did not clarify how such restrictions would be enforced, raising questions about the legal and regulatory mechanisms available to the White House. Analysts noted that buybacks and dividends are entrenched in the financial strategies of established defense companies, many of which rely on consistent shareholder returns to support their valuations.
Lockheed Martin, for example, increased its dividend to $3.45 per share for the 23rd consecutive year in October while also authorizing up to $2 billion in share repurchases, bringing its total repurchase commitment to more than $9 billion.
Trump’s criticism comes amid longstanding concerns about delays and cost overruns in major U.S. defense programs. Lockheed’s F-35 fighter jet, one of the most expensive weapons systems ever developed, has faced repeated schedule delays and rising costs. Meanwhile, Northrop Grumman’s Sentinel intercontinental ballistic missile program, designed to replace the aging Minuteman III system, is expected to be 81 percent over budget, according to the U.S. military.
Neither Lockheed Martin nor Northrop Grumman responded to requests for comment.
For defense investors and contractors alike, Trump’s intervention underscores the growing political risk in the sector, even as government spending is expected to rise sharply. While a larger military budget promises long-term revenue growth, tighter controls on executive pay, capital returns and delivery timelines could fundamentally change the way defense contractors operate in the coming years.
