Scott Bessent Blasts Defense Companies Over Missed Deadlines And Big Bonuses: Lockheed Martin, Boeing, RTX In Focus

Treasury Secretary Scott Bessent has criticized the performance of major U.S. defense contractors, citing delays in fulfilling contracts, excessive stock buybacks, and high executive compensation.

Bessent Slams Defense Contractors

Speaking at the World Economic Forum in Davos, Switzerland, Bessent told Maria Bartiromo of Fox Business about the significant delays in fulfilling contracts, which he claimed were five to seven years behind schedule.

“These defense contractors have let down the American people,” stated Bessent.

Bessent stated that these companies, which rely on the U.S. government for their existence, need to prioritize building more factories and reducing stock buybacks.

He also criticized the high compensation of defense CEOs, saying, “these CEOs making $30-$50 million a year for failing the American people.”

He suggested that these restrictions on stock buybacks and factory expansion would remain in place until the companies reach a “normalized level of backlog,” which he said could be two years or three years.

Trump Targets Defense Spending Practices

Earlier in January, President Donald Trump ordered defense contractors to halt dividends and buybacks, accusing them of underinvesting in production while paying executives too much. This led to a sharp fall in defense stocks, including major players like Lockheed Martin (NYSE:LMT), General Dynamics Corp (NYSE:GD) and Boeing (NYSE:BA).

The president sharply criticized RTX Corp's Raytheon (NYSE:RTX), saying the company must increase "upfront investment in plants and equipment" or risk losing contracts with the Department of War. He added that the department has flagged Raytheon as the least responsive defense contractor.

Trump’s order was immediately followed by his call for a $1.5 trillion military budget, putting the defense industry in the spotlight once again. 

Price Action: Over the past year, RTX stock climbed 56.15%, while Boeing, General Dynamics Corp and Lockheed Martin, rose 41.83%, 32.23%, and 13.78%, respectively, as per data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.