Trump Signs Order Limiting Defense Buybacks, Proposes $1.5T Budget

President Donald Trump signed an executive order on Wednesday aimed at curbing practices among U.S. defense contractors that he said undermine military production, while proposing a 50 percent increase in the defense budget to $1.5 trillion. The move targets companies accused of prioritizing shareholder dividends and stock buybacks over investments in facilities and equipment, with Trump specifically criticizing RTX, formerly Raytheon, as the least responsive to the Department of Defense's needs.

The executive order prohibits defense contractors from issuing dividends or conducting stock buybacks until they demonstrate improved performance, including timely delivery of products on budget. It also caps executive compensation at $5 million annually until firms build new production plants and accelerate equipment maintenance and repairs. "While we make the best Military Equipment in the World No other Country is even close!, Defense Contractors are currently issuing massive Dividends to their Shareholders and massive Stock Buybacks, at the expense and detriment of investing in Plants and Equipment," Trump wrote in a Truth Social post. "This situation will no longer be allowed or...