Register

White House to Block Buybacks, Dividends for ‘Underperforming’ Defense Firms

Trump administration aims to boost production of equipment and weapons systems.

F-35 in production
F-35 in production [Credit: Angel DelCueto/Lockheed Martin]
Gemini Sparkle

Key Takeaways:

  • President Trump issued an executive order blocking underperforming defense contractors from conducting stock buybacks and paying "excessive" dividends.
  • The directive aims to prioritize production capacity, innovation, and on-time delivery of military equipment over shareholder returns, addressing perceived inefficiencies and delays in the defense industrial base.
  • Trump specifically criticized Raytheon for perceived underperformance and prioritizing shareholders, threatening to cease business with the company if it doesn't invest more in production.
  • Defense contractors are seeking legal advice on compliance, with indications they may curtail buybacks and executive bonuses to avoid conflict with the administration.
See a mistake? Contact us.

In a move that could have major ramifications for the military aerospace industry, President Donald Trump said this week that he will block defense contractors from executing stock buybacks and “excessive” dividends if they underperform.

In an executive order issued Wednesday, the president slammed the defense sector for, in his view, prioritizing shareholders “at the cost of production capacity, innovation, and on-time delivery.”

Zach Vasile

Zach Vasile is a writer and editor covering news in all aspects of aviation. He has reported for and contributed to the Manchester Journal Inquirer, the Hartford Business Journal, the Charlotte Observer, and the Washington Examiner, with his area of focus being the intersection of business and government policy.

Ready to Sell Your Aircraft?

List your airplane on AircraftForSale.com and reach qualified buyers.

List Your Aircraft
AircraftForSale Logo | FLYING Logo
Pilot in aircraft
Sign-up for newsletters & special offers!

Get the latest stories & special offers delivered directly to your inbox.

SUBSCRIBE