General Electric CEO Larry Culp acknowledged Monday that his decision to slash the quarterly dividend to a penny sent regular investors scrambling.
"When we announced on our earnings conference call that we were taking our dividend down to 4 cents a year, we didn't do anything positive for our retail shareholder base and they have been exiting the stock, I think, as a result," Culp told CNBC's David Faber on "Squawk on the Street."
But even with the stock's slide over the past several weeks, Culp says GE "would make those same decisions today, because those were the right decision to make sure the company is facing forward." GE shares have fallen about 20 percent in November, on pace for its worst month of trading since February 2009.
About one-third of GE shares are held by retail investors, a higher than average mix for a public company.
GE's dividend cut, the second in a year, came as a dramatic move by Culp to free up cash for the beleaguered company. Once treasured by shareholders for its payout, GE expects to retain about $3.9 billion in cash a year as a result of the cut. GE has struggled to turn its falling stock as the company is weighed down by its weak power business and its heavily indebted GE Capital portfolio.
Beyond retail investors, Culp said GE stock's recent fall also came from a flight of institutional investors. Culp said the decision to remove the company's full-year profit forecast from its most recent earnings report was "another unpopular decision but one that was straightforward."
"We didn't have the confidence and conviction that we would want, particularly around our power business, as we looked toward the end of the year. That didn't do much for our institutional holders," Culp said.
"The stock has been under pressure" during the last two weeks, Culp added, "no doubt about that."
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