Trump Wants To Ban Dividend Payments For US Arms Companies

WASHINGTON, Jan 8 (Bernama-dpa) -- President Donald Trump said on Wednesday that he wants to bar United States (US) defence and arms manufacturers from paying dividends or conducting share buybacks until further notice, arguing that the practices are undermining investment in production capacity, reported German Press Agency (dpa).

"Defence contractors are currently issuing massive dividends to their shareholders and massive stock buybacks, at the expense and detriment of investing in plants and equipment," Trump wrote on his Truth Social platform on Wednesday.

"This situation will no longer be allowed or tolerated," he added.

Under Trump's proposal, executives at defence companies would also be barred from earning more than US$5 million a year.

It was unclear how Trump intends to enforce the proposed bans or whether he has the legal authority to implement them.

Trump also demanded that executives must "new and modern production plants, both for delivering and maintaining this important equipment, and for building the latest models of future military equipment."

Once "problems" were solved, Trump said he wanted to reauthorise dividend payments and share buybacks and lift the cap on executive salaries.

Dividend payments and share buybacks are usually used to make investments in companies more attractive to investors, return excess capital to shareholders and support the companies' share prices.

Critics argue that this can result in a shortage of funds for long-term investments, research, or the expansion of production capacities.

--BERNAMA-dpa