Trump Targets Defense Industry Norms with Bold Executive Order

President Donald Trump has issued an executive order prohibiting defense contractors from paying dividends or buying back shares until they accelerate weapons production. Criticizing high costs and slow production, Trump aims to enforce significant changes in America's military-industrial complex, impacting major defense firms and Wall Street norms.

In a move that could reshape America's military-industrial complex, President Donald Trump has announced an executive order targeting defense contractors like RTX, demanding accelerated weapons production. This directive prohibits defense firms from paying dividends or buying back shares, sparking a downturn in defense stocks and raising concerns among industry leaders.

Trump's decision is a response to perceived high costs and sluggish production rates within the defense sector. The order, announced alongside widespread criticism of executive pay packages, signals a shift in how defense companies are expected to operate, prioritizing efficiency and delivery over investor returns. This change comes as recent military actions underscore the strategic importance of rapid equipment availability.

The executive order has tasked Pentagon chief Pete Hegseth with identifying underperforming contractors and enforcing compliance within a strict timeline. This includes prohibiting stock buybacks and linking executive compensation to performance metrics that emphasize timely delivery and operational improvements.

(With inputs from agencies.)