TheChek News Flow

The president said he wants companies to instead spend on new plants

President Trump said Monday he wants to pressure America’s largest defense contractors to speed up weapons production by investing in new facilities and ending the practice of repurchasing stocks.

“They want to buy back their stock—I don’t want them to buy back their stock,” Trump said, adding that he would make his case to top defense executives in Florida next week. “I want them to put the money in plants and equipment so they can build these planes fast.”

Speaking at his Mar-a-Lago club in Palm Beach on Monday after announcing a new class of Navy battleships that will bear his name, Trump also criticized the high pay of executives at defense firms.

“We’ll be discussing the pay to executives, where they’re making $45 and $50 million a year and not being able to build quickly,” Trump said. “They’re going to make that kind of money, they have to build quickly.”

By repurchasing their own stock, companies reduce the number of publicly available shares, driving up the earnings per share as a way to increase their stock price and return money to shareholders. Critics of the practice say companies should instead invest that money back into facilities, workers and other areas to improve the company.

Trump expressed frustration that allies have to wait years to purchase new weapons, including the F-35 stealth fighter, which is manufactured by Lockheed Martin.

“We have many people [who] want the F-35 fighter jet, and it takes too long to deliver them to allies or to ourselves,” Trump said. “The only way they’re going to be able to deliver them is if they build new plants. They don’t want to build new plants because it’s expensive.”

Trump’s comments come as the Pentagon is in tense conversations with Lockheed Martin and RTX over the investments in new factory space and machinery needed to surge missile production rates, an issue that has been front and center amid large U.S. weapon transfers to Ukraine. The military still lacks the multiyear funding to fully meet its production targets, prompting some officials to ask defense contractors to add more capacity on spec ahead of actual orders.

Over the past week, rumors of an executive order banning stock repurchases and targeting executive compensation have spread throughout the defense sector.

“This seems to be an overreach, and, in our view, the contractors don’t need to be regulated given contract structure and clearer demand signals self-regulate investments,” analysts from investment bank Jefferies’ wrote in a note to investors last week amid reports that an executive order was in the works.

Officials from both political parties have criticized companies that buy back shares after collecting massive federal contracts. The Biden administration’s 2022 Chips Act limited grant recipients’ ability to repurchase shares, and several Democratic lawmakers have targeted defense contractors for what they call war profiteering.

Sen. Elizabeth Warren (D., Mass.), who has long pushed to limit companies from repurchasing stocks and giving their executives high salaries, last week offered to work with the Trump administration on this issue.

“Contractors should be prioritizing investments in research, development, and their workforce to help strengthen America’s innovation. Shortfalls in defense contractors’ workforce increase delays and spending for DoD,” Warren wrote with Rep. Chris Deluzio (D., Pa.) in a Dec. 16 letter to Treasury Secretary Scott Bessent.

A ban on buybacks could push investors away from publicly traded companies and toward venture-backed tech startups, said Richard Aboulafia, managing director at AeroDynamic Advisory.

“What it will affect is investor sentiment against legacy companies, which typically use buybacks and dividends to attract investors,” Aboulafia said.