According to the Zhitong Finance APP, three informed sources have revealed that the White House is planning to issue an executive order that will restrict defense contractors with delayed and over-budget projects from paying dividends, conducting stock buybacks, and issuing 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.
One official stated, &#34;Any discussions about a potential executive order are purely speculative until the White House makes an official announcement.&#34;
One source disclosed that the proposed order will require defense companies to more closely tie executive compensation to the overall performance level of delivering specific weapon systems.
The Trump administration has long complained about the high costs and slow progress of the defense industry and has promised extensive reforms to speed up the production of weapons and related technologies.
Last month, Defense Secretary Peter Hegseth announced a reform plan for the Pentagon's weapon procurement aimed at accelerating the procurement process and eliminating bureaucratic practices.
Defense contractors' stock prices slightly declined in pre-market trading on Wednesday: Lockheed Martin (LMT.US) fell 1.5%, L3 Harris Technologies (LHX.US) fell 1.4%, Leidos (LDOS.US) fell 0.4%, Northrop Grumman (NOC.US) fell 1.2%, General Dynamics (GD.US) fell 0.%, and Raytheon Technologies (RTX.US) fell 0.8%

The White House plans to issue an executive order to restrict defense contractors that experience project delays and budget overruns from paying dividends, conducting stock buybacks, and issuing executive compensation. The order may require linking executive compensation to the performance of weapon system deliveries. Defense contractor stock prices fell slightly

Trump plans to take action against overspending arms dealers: using executive orders to restrict dividends, buybacks, and executive compensation