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

Verified

Edited By:

Travis Tingle

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

Key Takeaways:

President Trump issued an executive order blocking underperforming defense contractors from conducting stock buybacks and paying "excessive" dividends.
The directive aims to compel the defense sector to prioritize production capacity, innovation, and timely delivery of military equipment over shareholder returns.
The Defense Department will identify non-compliant contractors and integrate these restrictions into current and future contracts, with Trump specifically criticizing Raytheon.
Defense firms are seeking legal advice on compliance, despite initial stock dips mostly recovering.

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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.”