NEW YORK -- Directors of United Industrial Corp., the parent of Cockeysville-based AAI Corp., voted yesterday to cut the quarterly common stock dividend by 69 percent, to a nickel a share.
The move, approved by the board after the annual shareholders' meeting here, came less than two weeks after the abrupt resignation of Thomas V. Murphy as president and chief executive of AAI. United reported Friday a first-quarter loss of $16.5 million, primarily because of losses suffered by AAI.
The company said the quarterly dividend, which had been at 16 cents a share, was payable Aug. 27 to shareholders of record as of Aug. 3. United shares closed at $6.875 yesterday, down 12.5 cents in New York Stock Exchange trading.
At a somewhat stormy annual meeting, several shareholders encouraged United's 85-year-old chairman and president, Bernard Fein, to step down and turn the company over to "younger and more vigorous" management.
William Steiner, an investor with more than 600 shares of United stock, was the first shareholder at yesterday's meeting to suggest that itwas time for a major management shake-up.
He attributed the company's poor performance over the past year to ineffective management and told Mr. Fein, who has served as chairman for 35 years, that it was "time for him to get up and go."
Mr. Steiner also suggested that United -- including its chief subsidiary, AAI -- be sold or merged into a larger company with greater resources "so that it does not just fade away."
In response, Mr. Fein noted that when he took over the company, it had a negative net worth and had been delisted from the New York Stock Exchange. Saying that he "owned 20-some-odd percent" of United's stock, Mr. Fein took credit for building the company into a business with $251 million in sales last year.
Mr. Fein placed blame for United's sharp drop in earnings last year, as well as its first-quarter loss, on the younger management at AAI and insisted that he was still competent to run the company. The Cockeysville unit accounts for about 80 percent of United's total sales.
"Mr. Fein, you're living in the past," Mr. Steiner interjected. "It'stime for you to say 'Goodbye,' step down and relax."
Later in the meeting, Mr. Fein hinted that he might be thinking about retirement as he disclosed that United has recently begun a search for an executive vice president who would eventually take over as president. United also is searching for a new head of AAI.
After the meeting, Mr. Fein said he did not want to step down "until everything at AAI is straightened out."
AAI, which has eliminated nearly 2,000 jobs in recent years, is scheduled to lay off 225 or more workers by the end of next week.
Last week, Mr. Fein was critical of AAI's management. He said they had tried to hide the losses the company was suffering in several major contracts, including the production of simulators to train military helicopter pilots and a fire-fighting trainer sold to commercial customers.
Ann Reeves, who said she was a long-time shareholder, also suggested that it was time for changes at the top.
Ms. Reeves was also critical of the way the company responded to stockholders.
She said she thought that United was run like a private company controlled by a family and a group of very loyal stockholders, not like a publicly owned corporation.