Trump Pushes for Ban on Dividend Payments and Stock Buybacks at Defence Companies

U.S. President Donald Trump announced on Wednesday that defence companies would be barred from paying dividends or conducting stock buybacks until they resolve ongoing issues in the production and maintenance of military equipment, according to Reuters.

In a post on Truth Social, Trump criticised defence contractors for slow delivery of military hardware and inadequate upkeep of equipment once produced.

“Defence companies are not producing our military equipment quickly enough, and once produced, they are not maintaining it properly or promptly,” he said.

Trump also condemned high executive pay in the defence sector, calling it “exorbitant and unjustifiable.” He stressed that senior executives should focus on expanding and modernising production capacity rather than rewarding shareholders and management. “From this point forward, these executives must build new and modern production facilities to deliver and maintain essential equipment and to develop future military models,” he added, without naming specific firms or individuals.

He proposed a cap on executive compensation, suggesting that no defence industry executive should earn more than $5 million annually until production challenges are resolved. While substantial, he noted this is far below the current earnings of many top executives.

Reuters reported that Trump’s remarks reflect long-standing concerns from both the president and the U.S. Department of Defense over what they view as an expensive, slow-moving, and entrenched defence industry. The statements signal potential tighter government oversight of defence contractors and may affect investors, as dividends and share buybacks are important components of shareholder returns in the sector.