Former US President Donald Trump has declared a sweeping crackdown on America's major defence companies, accusing them of prioritising shareholder payouts and lavish executive salaries over the timely delivery of vital military equipment.
Executive Pay and Buybacks Under Fire
In a post on his Truth Social platform, Trump targeted the defence industry's financial practices. He claimed that while the United States produces the world's best military hardware, contractors are failing to deliver it swiftly enough to the US armed forces and allied nations. He directly linked this delay to what he termed "exorbitant and unjustifiable" executive compensation packages and substantial dividends and stock buybacks for shareholders.
Trump stated he would "not permit" dividends or stock buybacks for these companies until they rectify the delivery issues. Furthermore, he proposed capping executive salaries at $5 million until firms accelerate production and invest in new, modern manufacturing plants.
Record CEO Pay Amidst Record Defence Spending
The intervention comes against a backdrop of soaring US defence expenditure, which Trump has pushed to nearly $1 trillion annually. Last month, he signed a bill authorising a record $901 billion in military funding.
This financial commitment contrasts sharply with the compensation figures Trump highlighted. In the 2024 fiscal year, the chief executives of leading contractors received immense packages: Northrop Grumman's CEO received over $24.3 million, while the CEOs of Lockheed Martin and General Dynamics each got more than $23.7 million. The RTX CEO's compensation exceeded $18 million.
When contacted for comment, General Dynamics declined to respond. Lockheed Martin, RTX, and Northrop Grumman did not immediately reply to requests for statement.
A Broader Context of Military Action and Ambition
Trump's announcement follows significant international military and strategic moves by his administration. It comes just days after US forces conducted a strike in Venezuela and captured its president, Nicolás Maduro. Simultaneously, the administration has confirmed it is exploring "a range of options" to acquire Greenland, noting that using the US military for such a purpose remains "always an option".
In his social media post, Trump framed his ultimatum as a matter of national urgency and fiscal responsibility. "MILITARY EQUIPMENT IS NOT BEING MADE FAST ENOUGH!" he wrote. "It must be built now with the Dividends, Stock Buybacks, and Over Compensation of Executives, rather than borrowing from Financial Institutions, or getting the money from your Government."
However, the former president did not outline a specific legislative or regulatory plan to enforce these proposed restrictions on defence contractors' financial activities.
