Warren, Hawley Introduce Bipartisan Bill to Limit Stock Buybacks in Defense Contracting Following President Trump’s Executive Order

Warren, Hawley Introduce Bipartisan Bill to Limit Stock Buybacks in Defense Contracting Following President Trump's Executive Order

The bill would implement key directives of President Trump's EO

Bill One-Pager (PDF) | Bill Text (PDF)

Washington, D.C. - U.S. Senators Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.) introduced the bipartisan Prioritizing the Warfighter in Defense Contracting Act of 2026, new legislation that would limit stock buybacks and excessive executive compensation in defense contracting. This follows after President Trump issued an executive order with similar directives to promote increased investments to meet the needs of our service members.

"It makes no sense for the federal government to fork over billions in taxpayer dollars to giant military contractors while their executives buy back their own company's stock instead of investing in our national defense," said Senator Warren. "This bipartisan bill will stop defense contractors from abusing the system at taxpayer expense and put our national security over Wall Street profits."

"America's defense contractors should be focused on expanding production, not padding their bottom lines. But even as they make record profits, some firms have spent big on stock buybacks, dividend payouts, and exorbitant executive salaries. Earlier this year, President Trump led the way with an executive order barring underperforming defense companies from engaging in these practices. Now, it's time for Congress to act by codifying the President's executive order into law, ensuring that America's warfighters are prioritized over corporate profit," Senator Hawley said.

For decades, defense contractors have consistently fallen short in delivering weapons programs to the Department of Defense (DoD) on time and on budget. In a recent study, the Government Accountability Office's annual weapons system assessment found that programs continue to be plagued by delays and cost overruns. In 2025, delays for major programs over a single year increased "by 18 months," and combined cost estimates rose by over $49 billion.

At the same time, many defense contractors have spent billions on stock buybacks, dividends, and excessive executive compensation. Since 2020, the five largest contractors have ploughed more than $100 billion into buybacks and dividends-more than twice what they invested in capital expenditures. A 2023 review by the Pentagon found that "despite increased profit and cash flow [between 2009 and 2019], defense contractors chose to reduce the overall share of revenue spent on [independent research and development] and capital expenditures." Yet the share of industry revenue devoted to stock buybacks grew from 3.7% to 6.4% during the same period.

In January, President Trump issued an executive order to address this issue, restricting executive pay packages and limiting stock buybacks and dividend payments for defense contractors that don't meet DoD's needs and fail to invest in expanding their production capacity.

The senators' bill would codify President Trump's executive order, ensuring that America's defense needs are prioritized over contractors' bottom lines.

The Prioritizing the Warfighter in Defense Contracting Act would:

• Prohibits Defense Contractors from Enriching Executives and Shareholders at the Cost of the Warfighter by prohibiting any large defense contractor from purchasing its own stock, paying out dividends, paying executives more than $5 million, or linking executive pay to short-term financial metrics unless the Secretary of Defense issues a waiver certifying that the company is meeting the Department's needs.

• Prescribes Reforms for Failing Contractors by establishing a review process for the Pentagon to identify underperforming contractors and allows for contractors so designated to present a remediation plan to the Pentagon.

• Holds Contractors Accountable by authorizing the Department to hold delinquent contractors accountable, including by suspending contract payments, ending eligibility for progress payments, and terminating contracts.

• Increases Transparency by requiring the Pentagon to publish annual reports identifying contractors who are subject to the requirements of the bill, any waivers that have been granted, and any contractor violations of the bill's provisions. It also requires the Department to provide Congress with information on waivers granted.

This legislation is endorsed by the Project on Government Oversight.

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