WASHINGTON, United States (North America): Senators Elizabeth Warren and Mike Lee urged U.S. Secretary of War Pete Hegseth to support permanent limits on defence contractor payouts, Fox News Digital reported on August 11.
Their letter asked Hegseth to back the Prioritising the Warfighter in Defence Contracting Act of 2026. The senators said the bill would place key parts of a January executive order into federal law.
Warren introduced the bill with U.S. Senators Josh Hawley and Mike Lee on March 25, according to Congress.gov.
President Donald Trump of the United States signed Executive Order 14372 on January 7. The order requires future contracts to restrict buybacks and dividends when contractors underperform or fail to meet production needs.
It also links incentive pay to delivery, production and investment targets. Warren’s office said the bill would cap executive pay above $5 million unless the defence secretary grants a performance waiver.
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Trump’s order separately permits current-level base-salary caps for executives at underperforming contractors.
Warren and Lee said their staff reviewed earnings calls and filings from the 20 largest publicly traded U.S. defence contractors.
They reported that first-quarter buybacks and dividends fell $2 billion from a year earlier. Capital spending rose $1.2 billion during the same period, their analysis found.
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The senators said four major contractors reduced combined payouts from $4.2 billion to $2.7 billion year over year. They reported declines at Lockheed Martin, Northrop Grumman and General Dynamics, while RTX recorded a slight increase.
The senators acknowledged that their analysis did not trace withheld shareholder payouts directly into capital investment. They cited higher GE Aerospace buybacks as evidence that legislation remained necessary.
Warren’s office said the Senate Armed Services Committee included part of the bill in its fiscal 2027 defence package. Neither the department nor the named companies had responded.
