General Electric Co. (GE - Get Report) fell Wednesday, April 25, as Moody's lowered the Boston-based industrial conglomerate's ratings outlook to negative, even though shareholders gathered and largely backed management's proposals.

"The negative outlook reflects the added headwinds to restoring GE's credit profile as a result of the $1.5 billion reserve that GE recorded in relation to the investigation by the Department of Justice of possible violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 by WMC, GE Capital's discontinued mortgage business," the ratings giant said in a statement. "This reduction occurs at a time when GE Capital's capital adequacy is already severely weakened due to a $7.5 billion after-tax charge related to its long-term care insurance activities taken in the fourth quarter of 2017."

Moody's also moved GE Capital's standalone credit profile into junk bond territory, cutting the rating from Baa3 to Ba1, citing further weakening of the company's capital position. According to Moody's, obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk. Moody's affirmed GE's A2 senior unsecured rating.

"The rating differential between the parent and finance company underscores the necessity for parental support to help ensure access to funding at a reasonably low cost," said Bloomberg Intelligence analyst Joel Levington.

Still, the ratings of GE could be downgraded if the company is "unable to demonstrate meaningful improvements in free cash flow" or if "Moody's expects that revenues in the Power segment will be subject to further declines beyond 2019," the ratings giant said. Power was a weak spot in the company's first-quarter results.

Shares of GE fell 4.3% to $14.05.

Meanwhile, at GE's annual meeting, which took place in Imperial, Pennsylvania, shareholders elected all of the board nominees. Under Chief Executive Officer John Flannery, the revamped board consists of just 12 members instead of 18.

About 65% of stockholders voted to reauthorize KPMG as GE'S auditor, continuing the century-old relationship even as GE faces federal probes into its accounting practices. Influential proxy advisory firms Glass Lewis and Institutional Shareholder Services had urged shareholders to vote against keeping KPMG.

Aside from voting on proposals, some shareholders used the meeting to voice their concerns about GE to Flannery, who said he was "keenly aware" of pain caused by the company's poor performance and dividend cut last year and vowed to "fix the business."

"I strongly feel we have very, very good businesses that need to be the center of gravity of the company going forward," Flannery told shareholders. "It is a lot of change, change is not easy in any organization...the company is going to come out stronger."