Defense contractors wanting to buy back their own stock or pay dividends would need explicit approval from the Defense Secretary under a new provision advancing through the Senate. The Senate Armed Services Committee approved the measure on June 15 as part of the FY2027 National Defense Authorization Act, passing it with an 18-9 vote.
What’s actually in the provision
The NDAA amendment covers stock buybacks, dividend payments, and other forms of equity distributions by defense contractors. To proceed with any of these, a contractor would need to secure a waiver from the Defense Secretary.
President Trump signed an executive order back in January 2026 that tied contractor capital returns to production performance metrics. Then in March, Senators Elizabeth Warren and Josh Hawley introduced the “Prioritizing the Warfighter in Defense Contracting Act of 2026” on March 26. That bill proposed limits on buybacks and executive compensation for defense firms. The NDAA provision builds directly on both of these efforts.
Larger defense contractors have historically prioritized shareholder returns over reinvestment in production capacity and national security readiness, spending billions on buybacks and dividends.
