Trump's Executive Order Shakes Defense Industry: Tying Pay to Warfighter Priorities

President Donald Trump's executive order linking defense contractors' pay, dividends, and stock buybacks to weapons delivery schedules may challenge industry norms. The order aims to prioritize military readiness over investor returns, causing contractors to seek legal advice on enforceability and potential implications.

Defense contractors find themselves in a legal quagmire following President Donald Trump's latest executive order that ties executive pay, dividends, and buybacks to weapons delivery schedules, sources reveal. The move seeks to realign defense priorities, possibly disrupting existing financial strategies.

Industry insiders express concerns regarding the order's enforceability, despite the potentially severe consequences for non-compliance. Experts indicate that while legal challenges may arise, the fear of aggravating the Trump administration weighs heavily on corporate decisions.

Notably, Trump's order immediately caused a dip in defense stocks, though they later surged as his administration announced a $1.5 trillion defense budget request. Top companies like Lockheed Martin and L3Harris are responding cautiously, while others remain silent on the development.

(With inputs from agencies.)