Trump halts dividends to arms manufacturers until they ramp up weapons production

US President Donald Trump has announced fundamental changes in relation to the US defense industry. The president has promised to block dividend payments and share buybacks by companies such as RTX and Lockheed Martin until they speed up weapons production and improve quality.

The executive order also limits executive compensation and mandates the construction of new manufacturing facilities. Trump criticizes companies for years of prioritizing investors over the military and promises to remedy the situation.

The markets reacted with a decline in the shares of several arms giants.

The Pentagon chief has 30 days to identify unsuccessful companies and request corrective plans from them. If they do not satisfy the government, they face severe sanctions. The order also calls on the Securities and Exchange Commission to prepare new regulations.

Another important point is the capping of salaries at $5 million per year and a ban on linking bonuses to short-term financial results.

(reuters, pir)