GE denies rumors of dividend cut; CEO buys 50,000 shares

With its shares briefly falling below $15 today, General Electric Co. insisted -- again -- that it has no plans to cut its dividend, despite rumors to the contrary.

CEO Jeffrey Immelt also stepped up with more than $800,000 of his own money to buy 50,000 GE shares in the open market, according to a filing with the Securities and Exchange Commission.

GE often is viewed as a microcosm of the global economy, which conjures up  bad images for investors when much of the world is skidding into a recession. And the company’s huge financial unit, GE Capital, has become a source of worry as the credit crunch has worsened.

Seeking to ease investors’ concerns, GE this week got permission to tap a new federal program under which up to $139 billion of GE Capital’s debt will be insured by the Federal Deposit Insurance Corp.

Today, vague rumors about a dividend cut helped push GE shares as low as $14.58, the lowest since 1996, from $16.29 at Wednesday’s close.

The company issued a statement reiterating its previous promise to maintain the current quarterly dividend of 31 cents a share through 2009.

The statement also noted that GE’s participation in the FDIC debt-guarantee program doesn’t place restrictions on the company’s dividend policy.

Meanwhile, Immelt today paid between $16.41 and $16.45 each for his 50,000 shares, which indicates he made the purchase early in the session.

Had he waited a bit, he could have gotten almost $2 off those prices, at the session’s low.

GE Vice Chairman Michael Neal showed better timing: He bought 50,000 shares today at $14.99 each, according to an SEC filing.

GE shares had rebounded to $16.11 just before noon PST, helped by a broad-based market turnaround.

Photo: GE CEO Jeffrey Immelt (Mike Theiler / European Pressphoto Agency)

Comments

[mr.bilko]

Paying dividends and getting Fed assistance? Paying lofty bonuses and getting Fed bailout money? This financial crisis is looking more like a hoax with each passing day. Companies in dire financial straits eliminate dividends and eliminate bonuses to conserve cash. Neither is happening on Wall Street. Something is seriously amiss in the Washington DC - NYC corridor.

[martscan]

Immelt's stock buy is nothing more than a PR move, and for a guy making over $10M a year since he's been CEO $800K isn't much more than a pimple on the ass of progress. A more efficacious public relations gesture would be to cut his GE income by $800K...or $1M..for a benefit to stockholders, albeit bottom line meaningless.

[Dee Basinger]

We knew the taxpayers bailing out huge corporations was a bad idea in the first place. But the government continues even though the taxpayers are upset. Do you think we need to vote out all the incumbents?