In a post on Truth Social on Wednesday, Trump criticised the defence industry for failing to deliver equipment at the pace required by modern warfare. He said financial rewards for shareholders would now be tied directly to production performance on the ground.
“Defence Companies are not producing our Great Military Equipment rapidly enough and, once produced, not maintaining it properly or quickly,” Trump wrote, making clear that dividends and share buybacks would remain off the table until output improves.
Trump and senior officials at the United States Department of Defense have repeatedly argued that long delays, cost overruns and poor maintenance weaken US military readiness and erode taxpayer confidence.
The announcement unsettled defence stocks, reversing gains seen earlier in the week. However, Trump did not provide details on how the restrictions would be enforced or the legal framework under which they would operate, adding to market uncertainty.
The earlier rally in defence stocks had followed the high-profile US military operation that led to the capture of Venezuelan President Nicolas Maduro, which briefly boosted investor confidence in US defence contractors.
Beyond shareholder payouts, Trump also took aim at executive compensation across the defence sector, calling current pay packages “exorbitant and unjustifiable.” He said executive salaries should be capped at $5 million — far below what many top defence executives currently earn.
“From this moment forward, these Executives must build new and modern production plants, both for delivering and maintaining this important equipment, and for building the latest models of future military equipment,” Trump wrote, without naming specific companies.
According to Reuters, dividends and share buybacks are widespread across the US defence industry and are a key tool used to attract investors.
For instance, Lockheed Martin raised its dividend for the 23rd consecutive year in October, increasing it to $3.45 per share. The company has also authorised up to $9.1 billion in share buybacks, including a $2 billion expansion approved last year.
Trump’s comments come amid persistent delays and cost overruns in major US defence programmes. Lockheed Martin’s F-35 fighter jet — one of the most expensive weapons systems ever developed — has faced repeated production setbacks and rising costs.
Similarly, the $140 billion Sentinel intercontinental ballistic missile programme, designed to replace ageing Minuteman III missiles and managed by Northrop Grumman, is expected to be years behind schedule and nearly 81% over budget, according to the US military.
Trump’s stance marks a break from long-standing Wall Street norms, sending a strong message to the military-industrial sector: faster production, tighter cost control and improved readiness must come before shareholder rewards. While enforcement details remain unclear, the announcement underscores the administration’s growing impatience with delays in strengthening US defence capabilities.
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