Trump Moves to Limit Defense Executives’ Pay to Encourage Development

U.S. President Donald Trump has called for limiting the payment of excessively high salaries and bonuses to executives of defense companies until the firms accelerate the production and maintenance of military equipment.

Trump wrote about this on Wednesday on his social media platform, Truth Social.

He also criticized the large dividend payouts to shareholders of American defense companies instead of investments in factories and equipment.

The White House chief believes that profits in the defense industry should be invested in the development of technology and production.

“…defense contractors are currently paying enormous dividends to their shareholders and engaging in massive stock buybacks at the expense of – and to the detriment of – investment in equipment and factories. This situation will no longer be allowed or tolerated!” Trump said.

According to the U.S. President, “defense companies are not producing military equipment fast enough, and after delivery they fail to provide proper maintenance.”

The President emphasized that executives must create new, modern capacities for the production and servicing of military equipment, as well as ensure the development of next-generation weapons.

“Until they do this, no executive should be allowed to earn more than $5 million, which, as high as that may sound, is only a fraction of what they are making now,” Trump noted.

He called for directing funds that are currently spent on dividends, stock buybacks, and excessive executive compensation directly toward expanding production, so that loans or budget funds would not need to be used for this purpose.

In the long term, this will benefit both executives and shareholders, as it will “serve the interests of the country,” the President added.

At the same time, Trump stated that the defense company Raytheon (RTX) is “the least responsive to the needs of the U.S. military, the slowest to ramp up production volumes, and at the same time the most aggressive in spending money on its shareholders.”

“Either Raytheon steps up and starts investing more funds upfront – including in factories and equipment – or they will no longer do business with the Department of War,” Trump wrote.