WASHINGTON — The Trump administration is weighing an executive order that would pressure defense contractors to spend less on stock buybacks and dividends while boosting investment in infrastructure and weapons production, a person familiar with the matter said.

The executive order, which President Donald Trump could sign as early as this week, would mark the latest effort by the White House to bring the defense contractors to heel. In a speech last month, Defense Secretary Pete Hegseth demanded the companies speed weapons development or “fade away.”

The proposed order would mandate that the companies tie executive compensation more closely to overall performance levels in delivering specific systems, said the person, who asked not to be identified discussing a plan that hasn’t been released.

Even so, it appears to be a White House effort. Pentagon officials only saw the draft order in the last two weeks, the person said. Depending on how it’s worded, the order could trigger a Pentagon review on how best to extract those demands from industry.

The White House didn’t immediately respond to a request for comment. Punchbowl first reported the order plans.

Trump’s ability to enforce such an order is unclear, and it would represent an extraordinary intrusion by the U.S. government into corporate affairs. But the administration hasn’t been shy about making similar demands in recent months, telling contractors to get in line with its priorities and even buying stakes in some companies.

Backed by Trump, Hegseth has said he intends to fix the painfully slow procurement process in which weapons are often overbudget, years late and sometimes obsolete by the time they debut. That challenge drew the ire of White House Chief of Staff Susie Wiles, who told Vanity Fair in an interview published Tuesday that Hegseth was the right person to take on the job.

“People talk about the deep state being at the State Department,” Wiles said. “It’s not. It’s the military-industrial complex.”

In his November speech, Hegseth demanded the biggest U.S. defense companies invest their own capital in speed and volume of delivery. Officials from defense companies such as Lockheed Martin Corp. and Northrop Grumman Corp. were in the audience when Hegseth delivered the remarks.

In October, Lockheed raised its quarterly dividend 15% and approved buying back up to an additional $2 billion, the Wall Street Journal reported at the time. Northrop pays a dividend of $2.31 per share.

But the companies have also made major investments. Earlier this month, Lockheed opened a new lab focused on hypersonic weapons in Alabama as part of a $700 million planned investment from the strategic and missile defense unit in recent years to expand and upgrade facilities. Northrop has invested more than $1 billion in advanced manufacturing facilities since 2018.

Undersecretary Michael Duffey, in a separate memo to the Pentagon senior leadership earlier this month, directed each military service to publish new contracting guidelines in the next 180 days that would ensure “clear incentives for timely delivery” and “increased production capacity”.

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