Prioritizing the Warfighter in Defense Contracting Act of 2026

This bill, titled the "Prioritizing the Warfighter in Defense Contracting Act of 2026," aims to ensure that large Department of Defense (DoD) contractors focus on mission requirements rather than corporate financial maneuvers. It mandates that any contractor receiving over $250,000,000 in annual DoD revenue must agree to specific financial restrictions. These include prohibiting the purchase of their own equity securities , paying dividends , or making other capital distributions. Furthermore, the legislation imposes limits on executive compensation for covered employees of these contractors, capping it at $5,000,000 per calendar year and disallowing it from being tied to short-term financial metrics like free cash flow or earnings per share driven by stock buybacks. Contractors must develop compliance plans and certify adherence annually, though the Secretary of Defense can grant waivers to those consistently meeting specific performance metrics, such as delivery dates and readiness requirements. Non-compliance can lead to penalties including payment suspension, contract termination, and potential clawbacks of executive compensation, with regular reports on compliance and waivers submitted to Congress.