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

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

Zach Vasile

Friday, January 09, 2026 at 10:30 AM ET

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Edited By:

Travis Tingle

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

Key Takeaways:

President Trump issued an executive order prohibiting underperforming defense contractors from executing stock buybacks and "excessive" dividends.
The directive aims to force contractors to prioritize production capacity, innovation, and on-time delivery of military equipment over shareholder returns, addressing long-standing concerns about efficiency and speed.
The order was prompted by perceived weaknesses in the defense industrial base, highlighted by slow production and cost overruns in programs and events like the Ukraine war.
Trump specifically criticized Raytheon (RTX), threatening to block its buybacks and contracts; defense firms are seeking legal advice on compliance while considering voluntary curtailment of distributions to appease the administration.

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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.”