While some companies and analysts fret about President Donald Trump’s threat to crack down on the defense industry, the founder of a $30 billion defense tech company has emerged as an unlikely supporter of his massive overhaul.
Palmer Luckey, who founded defense tech company Anduril in 2017, came out in nearly full support of Trump’s policies. While he noted without elaborating that all the changes “might not necessarily help the defense space,” he stood by Trump’s policy changes despite the president’s rebuke of defense companies as well as their CEOs.
“I think it’s even good maybe to scare people sometimes,” Luckey said in an interview with Bloomberg TV.
A spokesperson for Anduril declined to comment beyond Luckey’s public comments.
The reforms, which the White House outlined in a Wednesday executive order caps defense company CEO’s salaries at $5 million annually until certain conditions are met. As of around 2021, Luckey, who is not the CEO but the founder of Anduril, reportedly earned $10.9 million in compensation from the Company, TechCrunch reported. Luckey told Bloomberg he pays himself a salary of $100,000 a year. The CEOs of major defense contractors RTX Corp (formerly Raytheon) and Lockheed Martin made $18 million and $23 million, respectively, in annual compensation as of 2024.
Analysts warn of threat
The order also bars defense companies from issuing stock buybacks and dividends during periods of “underperformance.” It also required future defense contracts to bundle compensation with production speed and on-time delivery rather than “short-term financial metrics.”
As a private company, Anduril does not issue stock buybacks or dividends, although Luckey has previously said it is “definitely going to be a publicly traded company,” someday.
Luckey compared Trump’s defense reforms to “grounding” a teenager and noted they were positive as a temporary measure to help improve the sector’s performance overall. He added that the government should be the one calling the shots when it comes to public money spent on defense.
“I think when you are on the dole, and effectively run on the public’s wallet, the public should be able to impose whatever restrictions they want on you,” Luckey told Bloomberg TV.
Luckey’s support for Trump’s crackdown puts him at odds with his industry and potentially his own company’s interests (as it pertains to stock buybacks and dividends) as Anduril reportedly prepares for an IPO.
Trump’s defense industry reforms represent a major shift in the U.S. Government’s relationship with private companies, and analysts have warned that they could pose a threat to the sector. Shares of major defense contractors, including Lockheed Martin, Northrop Grumman, and Raytheon, each sank about 6% following the news before largely rebounding Thursday.
Yet, Anduril, which boasts Pentagon contracts for tech to defend against autonomous drones and border security systems, is on track with the new reforms “in most cases,” Luckey claimed.
He pointed to Anduril’s “Arsenal-1” plant for building autonomous vehicles in Columbus, Ohio, as evidence. Luckey said the company spent $900 million on the plant and built it faster than expected. The plant will start production this summer. He noted, though, that the company is behind schedule in developing a man-portable system to protect soldiers from drones due to the technology’s complexity.
Luckey, despite likely owning a portion of privately-owned Anduril, claims his salary comes in well below Trump’s threshold for CEO pay, and said he’s not worried about Trump’s proposed $5 million ceiling.
“If they say that I’m not allowed to pay myself $1 until I get caught up, I think they should be allowed to do that,” he said.
