Trump plans to “take action” against overspending arms dealers: use executive orders to restrict dividends, repurchases, and executive remuneration

The Zhitong Finance App learned that according to three people familiar with the matter, the White House is planning to issue an executive order that will restrict defense contractors whose projects are delayed and exceed budgets from paying dividends, carrying out stock repurchases, and paying executive remuneration.

The source added that the exact wording of the order is still subject to change. It's unclear how the order will force defense companies to implement any restrictions.

An official said, “Any discussion about a potential executive order is pure speculation until the White House officially announces it.”

A source revealed that the proposed order would require defense companies to more closely link executive pay to the overall level of performance in delivering specific weapon systems.

The Trump administration has long complained about the high costs and slow progress of the defense industry, and promised extensive reforms to speed up the production of weapons and related technology.

Last month, Defense Secretary Pete Hegseth announced the Pentagon's arms procurement reform plan, which aims to speed up procurement and eliminate bureaucracy.

Defense contractor shares fell slightly before the market on Wednesday: Lockheed Martin (LMT.US) fell 1.5%, L3 Harris Technology (LHX.US) fell 1.4%, Leidos (LDOS.US) fell 0.4%, Northrop Grumman (NOC.US) fell 1.2%, and General Dynamics (GD.US) fell 0. %, Raytheon Technology (RTX.US) fell 0.8%.