Trump plans to "take action" against overspending arms dealers: to restrict dividends, buybacks, and executive compensation through executive order.

According to three informed sources, the White House is planning to issue an executive order that will restrict defense contractors who have delayed projects and exceeded budgets from paying dividends, conducting stock buybacks, and issuing high executive compensation. The sources added that the specific wording of the order may still change. It is currently unclear how the order will enforce any restrictions on defense companies. An official stated, "Any discussions about potential executive orders are purely speculative until the White House makes an official announcement." A source revealed that the proposed order will require defense companies to align executive compensation more closely with the overall performance levels of specific weapon systems that are delivered. The Trump administration has long complained about the high costs and slow progress of the defense industry, promising broad reforms to improve the production speed of weapons and related technologies. Last month, Defense Secretary Mark Esper announced a Pentagon plan to reform weapon procurement, aiming to speed up the purchasing process and eliminate bureaucratic practices. Defense contractor stocks slightly declined in pre-market trading on Wednesday: Lockheed Martin fell 1.5%, L3 Harris Technologies dropped 1.4%, Leidos decreased 0.4%, Northrop Grumman fell 1.2%, General Dynamics Corporation dropped 0.5%, and Raytheon Technologies fell 0.8%.