Trump Bans Dividends and Share Buybacks for U.S. Defense Contractors... Also Moves to Restrict Institutional Purchases of Single-Family Homes

Trump Demands Increased Investment in Production Facilities and R&D from Defense Contractors
Proposes $5 Million Cap on Executive Compensation
Plans to Ban Institutional Investors from Purchasing Single-Family Homes to Stabilize Housing Prices

President Donald Trump of the United States criticized defense industry companies for being reluctant to invest in weapons production facilities and research and development (R&D), declaring that he would not allow dividend payments or share buybacks until investment is expanded. He also stated that he would pursue a ban on large institutional investors purchasing single-family homes as a measure to stabilize housing prices.

Donald Trump, President of the United States. Photo by Reuters Yonhap News

On this day, President Trump posted on his own social networking service (SNS), Truth Social, saying, "Defense contractors are not producing excellent military equipment quickly enough, nor are they maintaining and repairing equipment properly and promptly."

He argued that "until new, modern production plants capable of producing the latest military equipment for the future are built," excessive shareholder-friendly policies should be restricted, and executive compensation at defense contractors should be capped at less than $5 million (approximately 7.25 billion won). According to Bloomberg, Kathy Warden, CEO of Northrop Grumman, received total compensation of $24 million (about 3.48 billion won) in 2024, and Jim Taiclet, CEO of Lockheed Martin, received $23.75 million (about 3.445 billion won).

President Trump stated, "Until these issues are resolved, I will not allow defense contractors to pay dividends or buy back shares, nor will I permit executive salaries and compensation." He emphasized, "Instead of relying on loans from financial institutions or government support, companies must reduce dividends, share buybacks, and excessive executive compensation, and immediately invest in equipment production." He added, "In the long run, this will benefit both executives and shareholders, and it will be a great help to the United States."

However, President Trump did not specify how he would enforce these demands. Bloomberg News, citing sources, reported that the Trump administration is considering an executive order regarding this issue. In December of last year, President Trump also met with top executives from major defense contractors and pressured them to allocate funds for investment instead of share buybacks, dividends, and executive compensation.

Pressure on defense contractors is also intensifying at the administration level. Secretary of Defense Pete Hegseth criticized in November of last year that the weapons procurement process at defense companies is excessively slow, with repeated budget overruns and delivery delays. He publicly demanded that defense contractors invest their own capital to increase delivery speed and expand production volumes.

Additionally, President Trump indicated on this day that he would introduce regulations restricting institutional investors from purchasing homes to stabilize housing prices.

He wrote on Truth Social, "Due to the highest inflation in history caused by former President Joe Biden and the Democratic Party, the American Dream is becoming increasingly out of reach for more people, especially young Americans." He continued, "I will immediately take measures to ban large institutional investors from making additional purchases of single-family homes and will urge Congress to legislate this."

President Trump added that during his scheduled speech at the World Economic Forum (WEF) in Davos, Switzerland, two weeks from now, he would further discuss this issue, including measures to ease the burden of housing and living costs. According to the Federal Housing Finance Agency (FHFA), home prices in the United States rose by about 55% between 2020, when the COVID-19 pandemic began, and 2025.