Palmer Luckey Backs Trump Defense Regulations

Palmer Luckey, the founder of Anduril Industries, has voiced support for the Trump administration's new regulations targeting the defense industry. Speaking in an interview, Luckey described the new rules as a necessary measure to ensure accountability among major contractors.

The executive order signed by President Donald Trump bans defense contractors from performing stock buybacks or paying dividends until they can produce superior products on time and on budget. It also caps executive salaries at $5 million. Luckey stated that he is 'broadly aligned' with the administration's goals and that the fear of these consequences is beneficial for the industry.

Palmer Luckey believes the Trump administration's recent actions will have a positive impact on the defense sector. In an interview with Bloomberg TV, Luckey commented on the industry-wide reaction to the new rules, stating, "It's good to scare people sometimes."

The executive order was signed on Wednesday, targeting defense contractors for underperforming while distributing large dividends and offering exorbitant pay packages. Luckey, the founder and CEO of the defense technology startup Anduril, expressed that the administration's focus aligns with his own company's mission.

"President Trump is saying that he wants to see defence companies building new plants, building new factories, delivering on time, and then maintaining systems cost-effectively," Luckey said during an appearance on "The Close." He added, "I'd say I'm broadly aligned," noting that this philosophy is why he started Anduril years ago.

The executive order introduces strict limitations for defense contractors who fail to meet performance standards. President Trump criticized major contractors for prioritizing stock buybacks and shareholder dividends over production efficiency in a post on Truth Social.

The new regulations include the following measures:

• A ban on stock buybacks and dividends until contractors produce superior products on time and on budget.
• A cap on defense executive salaries at $5 million.
• Compensation tied to on-time delivery, increased production, and operational improvements.

Luckey confirmed that these rules apply to him as well. "These measures do apply in equal measure to me. I now cannot pay dividends. I now cannot do stock buybacks if I'm not investing in new plants," he told Bloomberg. He also revealed that he pays himself a salary of $100,000 a year, in addition to owning a significant stake in Anduril.

Anduril Industries has emerged as a significant player in the defense technology sector. The startup, which manufactures autonomous weapons, surveillance devices, and air vehicles, is valued at $30.5 billion as of June 2025 and is considering an IPO.

The company's mission is to modernize the US military through technology. As the United States seeks to update its warfare capabilities, Anduril has proven it can compete for contracts with legacy defense contractors like Lockheed Martin and Boeing.

Luckey argued that the new regulations are a direct result of the defense industrial base's shortcomings. "If these companies were doing really well, and if they were living up to their end of the bargain, I don't think you would see any action from Trump or others on this," he said. However, he did note that some of the proposals "might be bad moves" for the defense base, though he believes everything should be considered "in concept."