Former US President Donald Trump has declared he will impose a sweeping crackdown on America's major defence contractors, targeting what he calls "exorbitant" executive salaries and shareholder payouts until they accelerate the delivery of military equipment.
Social Media Ultimatum to Defence Industry
In a forceful post on his Truth Social platform, Trump accused leading defence companies of failing to deliver "vital" equipment swiftly enough to the US military and its global allies. He argued that this failure is happening while top executives receive massive compensation packages and shareholders benefit from generous dividends and stock buyback schemes.
Trump stated he would "not permit" dividends or stock buybacks by these firms, nor allow them to pay executives more than $5 million, until they rectify the delivery delays and invest in building new, modern production plants.
Scrutiny on Multi-Million Dollar CEO Pay
The intervention puts a spotlight on the substantial compensation awarded to chiefs of the nation's largest defence contractors. For the 2024 fiscal year, the CEO of Northrop Grumman received over $24.3 million in total compensation. The CEOs of Lockheed Martin and General Dynamics each received more than $23.7 million, while the head of RTX was awarded over $18 million.
General Dynamics declined to comment on the matter. Lockheed Martin, RTX, and Northrop Grumman did not immediately respond to requests for comment from journalists.
Context of Increased Military Spending
Trump's announcement comes amid a significant ramp-up in US defence expenditure under his administration. Last month, he signed a bill authorising a record $901 billion in military spending, pushing annual defence outlays close to $1 trillion.
In his social media statement, Trump emphasised, "MILITARY EQUIPMENT IS NOT BEING MADE FAST ENOUGH!" He insisted that funding for new production should come from redirected dividend, buyback, and executive compensation funds rather than from further government borrowing or financial institutions.
The former president's remarks followed recent significant military actions, including US strikes in Venezuela aimed at capturing President Nicolás Maduro. His administration has also publicly discussed the potential acquisition of Greenland, noting that using the US military for such a purpose remains "always an option".
As of now, Trump has not provided a detailed legislative plan for how he would enforce the proposed restrictions on defence contractor compensation and financial practices.
