How Trump Can Restrict Defense Contractors' Exec Pay, Stock Dividends
Business Insider••business
Key Points:
- President Donald Trump criticized military contractors for prioritizing shareholder dividends and stock buybacks over producing weapons and equipment, proposing to ban these financial practices and cap executive salaries until production improves.
- An executive order was issued directing Defense Secretary Pete Hegseth to tie contractor executive compensation to performance metrics such as production and delivery times, while restricting buybacks and shareholder payments during periods of underperformance.
- The order grants Hegseth broad authority to define underperformance and enforce salary caps, effectively giving him control over contractors' financial decisions, a move described by experts as unusual for defense contract management.
- Trump simultaneously called for a 50% increase in the Pentagon budget, from $1 trillion to $1.5 trillion, and singled
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