Overview
Defense One quoted Tyler Evans in an article titled, "Defense Business Brief: Exec order fallout; $1B rocket-maker deal; Acquisition changes, and more." The article discusses how a recent executive order titled "Prioritizing the Warfighter in Defense Contracting" will impact defense firms of all sizes.
Speaking on the executive order’s scope, Tyler told Defense One that aside from traditional publicly traded defense contractors, "there's a subtle, longer-term impact on all other contractors, including even private companies and maybe even some smaller companies."
The executive order will likely present compliance challenges for both large and small defense firms, affecting their options for paying dividends, buying back stock, and setting incentive compensation. The specific rules around how defense firms should handle executive compensation and incentives will depend on how the Pentagon ultimately implements the executive order.
Acknowledging the executive order’s ambiguity, Tyler provides the following considerations and insights for defense contractors: "How do we handle our incentives? What are we tying it to? Is there any way that somebody could claim that while we're underperforming in a contract, or not sufficiently investing or breaching the contract, that we haven't fairly tied incentives to improving contract performance versus just getting revenue or cash in the door, or stock price, if it's a public company, that kind of thing. So, I do think it will have a longer-term impact for all the different contractors."
