Lockheed Martin Corp (NYSE:LMT) shares are taking a plunge on Wednesday amid President Donald Trump’s social media post criticizing defense contractors over executive compensation, dividends and production speeds.
Lockheed Martin stock is showing notable weakness. What’s behind LMT decline?
What Happened: Trump issued a stern warning to U.S. defense contractors on Truth Social, demanding they halt dividends and stock buybacks until they invest more in production facilities and speed up equipment delivery.
The president said defense companies are issuing “massive Dividends to their Shareholders and massive Stock Buybacks, at the expense and detriment of investing in Plants and Equipment,” adding “This situation will no longer be allowed or tolerated!”
Trump also took aim at executive compensation in the defense industry, calling pay packages “exorbitant and unjustifiable given how slowly these Companies are delivering vital Equipment to our Military and our Allies.” He demanded that no executive be allowed to make more than $5 million until new production plants are built and equipment maintenance improves.
“Defense Companies are not producing our Great Military Equipment rapidly enough and, once produced, not maintaining it properly or quickly,” Trump wrote. “From this moment forward, these Executives must build NEW and MODERN Production Plants.”
The president said defense contractors won't be allowed to issue dividends or buy back stock until their production problems are fixed. He insisted that companies put that money toward expanding manufacturing capacity instead of turning to banks or government support.
LMT Price Action: Lockheed Martin shares were down 4.28% at $499.72 at the time of publication on Wednesday, according to Benzinga Pro.
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