Defense firms seek legal advice after Trump order linking payouts to deliveries

Defense contractors are consulting lawyers after President Trump signed an executive order tying buybacks, dividends and executive pay to weapons delivery schedules. The order prompted market moves and raised questions about enforceability.

President Donald Trump signed an executive order that links share buybacks, dividends and executive pay at defense contractors to weapons delivery schedules. The order, titled Prioritizing the Warfighter in Defense Contracting, has prompted several companies to seek legal advice. The White House framed the action as prioritizing military readiness over investor returns. Key points: - The executive order ties payout decisions to contractors' performance on weapons delivery, reported by Reuters. - Multiple defense firms have contacted legal counsel to assess enforceability and potential court challenges. - Industry sources said the order could chill major buybacks and bonuses as companies seek to avoid falling out with the administration. - Markets reacted: defense shares fell after the announcement and later rebounded when the administration signalled a larger fiscal year 2027 defense budget. Summary: The order has led to legal reviews within the defense industry and immediate market reactions, and questions remain about how and whether it can be enforced. Undetermined at this time.