Sen. Bernie Sanders urges Defense Secretary James Mattis to crack down on 'exorbitant' salaries of defense contractor CEOs

Key Points
  • Sen. Bernie Sanders tells Defense Secretary James Mattis to address "the excessive compensation of defense contractors."
  • The CEOs of the top five U.S. defense contractors earned a combined $96 million last year.
  • The Department of Defense is currently undergoing its first-ever audit, which is slated to be completed in September.
Sen. Bernie Sanders (I-VT) speaks during news conference at the U.S. Capitol on March 9, 2017 in Washington, DC.
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Sen. Bernie Sanders, I-Vt., sent a letter to Secretary of Defense James Mattis on Wednesday, asking him to address issues including "exorbitant" salaries for defense contractor executives.

Sanders asked Mattis to address the following three issues:

– What Sanders considers the excessive compensation of defense contractors.

– What the senator considers widespread misconduct and fraud in the defense contracting industry.

– Massive cost overruns in the Pentagon's acquisition budget.

"Corporate interests should never take precedence over the interests of taxpayers or our national security. But paying exorbitant salaries to defense contractor CEOs makes that outcome more likely, and that is simply unacceptable," Sanders wrote.

The CEOs of the top five U.S. defense contractors earned a combined $96 million in compensation last year.

The Defense Department declined to comment on the letter. "Any conversations between the Secretary and other officials are private matters, and we do not discuss the nature or content," a Pentagon spokesman told CNBC.

The letter comes one week after Sanders grilled Pentagon comptroller David Norquist over the multimillion-dollar salaries defense company CEOs earn.

In the letter, Sanders requested "a list of recommendations on reducing excessive defense contractor compensation, and what steps, if any, DoD is taking to address this issue."

Finally, Sanders called on Mattis to hold defense companies accountable for the approximately $484 billion in cost overruns and operational delays.

"Many DoD programs fall short of cost, schedule and performance expectations, meaning DoD pays more than anticipated, can buy less than expected, and, in some cases, delivers less capability to the warfighter," Sanders wrote, citing the Government Accountability Office.

Sanders laid out his concerns about defense contractors' executive pay in a Senate Budget Committee hearing on the Defense Department's business operations.

Marillyn Hewson, the Chairman, President and Chief Executive Officer of Lockheed Martin.
Carl Court | AFP | Getty Images

"I think the elephant in the room here is the relationship of the DoD to defense contractors. I think that's the area that needs the most research," Sanders said at the time.

"Does it make sense that we pay the Secretary of Defense $200,000 or less and we give a contractor, who gets 92 percent of his revenue from the taxpayers of this country, $18 million in taxpayer money," Sanders asked Norquist, the Pentagon comptroller, during the hearing.

While Norquist said he could not comment on how defense contractors pay their employees he said that taxpayers "should be paying for the service that we receive."

"I would hope that nobody here believes that just because this is the Department of Defense, we will defend an enormous amount of bureaucratic waste," Sanders said at the hearing.

Last year, the CEOs of Lockheed Martin and Raytheon — two of the top four U.S. defense contractors — were each paid more than $20 million in total compensation. More than 90 percent of those companies' revenue came from defense spending.

Read Sanders' full letter to Mattis below: