Trump blocks defence dividends and buybacks; executive pay capped at $5 million; stocks tumble

US President Donald Trump vowed to block defence contractors from paying dividends or buying back shares until they accelerate the production of military equipment. The announcement was made on Truth Social on Wednesday and sent defence stocks tumbling. It signals a rare direct intervention in the US military-industrial sector. He claimed that US produces the best equipment in the world and no country is even close to that benchmark. “Defense Companies are not producing our Great Military Equipment rapidly enough and, once produced, not maintaining it properly or quickly,” Trump posted. The GOP leader also criticised executive pay, calling it “exorbitant and unjustifiable,” and said it should be capped at $5 million.Trump did not provide details on how limits on dividends, buybacks, or salaries would be enforced. This uncertainty contributed to a drop in defence shares after his post, reversing recent gains following the dramatic use of US military equipment in Venezuela, reports news agency Reuters. The Latin American nation and its leader Nicolas Maduro were targeted last week under Operation Absolute Resolve on suspicion of narco-terrorism and drug peddling. Several large defence firms, including Lockheed Martin, routinely issue dividends and buy back stock. Lockheed recently raised its dividend for the 23rd consecutive year to $3.45 per share and authorised up to $2 billion in share repurchases, bringing total planned buybacks to $9.1 billion.The F-35 fighter jet programme has faced rising costs and delays, while the $140 billion Sentinel intercontinental ballistic missile project managed by Northrop Grumman is reported to be 81 per cent over budget, according to the US military.Trump’s full Truth Social post said that there is a dire need for new and modern production plants, improved maintenance, and faster delivery of equipment. “From this moment forward, these Executives must build NEW and MODERN Production Plants, both for delivering and maintaining this important Equipment, and for building the latest Models of future Military Equipment,” he said.The MAGA chief said dividends, stock buybacks, and excessive executive compensation should be suspended until these issues are resolved. “MILITARY EQUIPMENT IS NOT BEING MADE FAST ENOUGH! It must be built now with the Dividends, Stock Buybacks, and Over Compensation of Executives, rather than borrowing from Financial Institutions, or getting the money from your Government,” he added.Trump also warned that he needs the changes “spot on, on time.”