In a bold move aimed at reshaping the defense sector, President Trump signed an executive order Wednesday targeting stock buybacks by major defense contractors. The order directs companies to cap executive compensation and prioritize investments in production capacity over shareholder payouts.
Officials said the measure seeks to ensure that federal defense spending translates more directly into increased industrial output and national security readiness, rather than boosting corporate profits or executive bonuses. The administration emphasized that the policy is intended to strengthen the U.S. defense industrial base amid growing global security challenges.
Defense industry leaders have expressed mixed reactions, with some warning that limiting buybacks could reduce flexibility in capital management, while others acknowledge the push for greater accountability in spending taxpayer dollars.
The executive order is the latest in a series of Trump administration initiatives aimed at aligning corporate incentives with national security priorities. Analysts say the move could prompt a major restructuring of how defense firms allocate capital and compensate top executives.