UAL Plans to Pay Dividend, Buy Back Stock

UAL Corp. said that it plans to pay a common dividend next year for the first time in 13 years and to buy back up to $300 million of its stock, rewarding employees, who own 55% of the company, and other shareholders. The parent of United Airlines plans to issue a $1.25-a-share dividend annually if shareholders approve it next year. The buyback represents about 8.3% of the company’s outstanding shares. UAL’s board has already made charter changes that will let workers receive dividends on the stock the way other shareholders do. UAL’s pilots’ and machinists’ unions, which represent more than half its work force, helped the carrier stop years of losses in 1994 by trading $4.9 billion in pay and benefits for an ownership stake. UAL has since earned about $2.7 billion and is starting to negotiate with unions about ways to compensate workers while dropping the employee stock plan. Only pilots, machinists and a group of nonunion management employees participate in the ESOP. UAL shares fell $3.25 to close at $64.81 on the NYSE.