Pay-Fone President Dismissed; Chief Operating Officer Takes Over

Pay-Fone Systems Inc., a struggling Van Nuys provider of automated payroll services, dismissed president and chief executive Guy Lundberg and replaced him with A. J. Holzherr, its chief operating officer.

Holzherr, 42, joined Pay-Fone 14 months ago after three years with Safeguard Business Systems Inc. in Fort Washington, Pa., where his last post was senior director of automated payroll services. Earlier, he spent 15 years with Automatic Data Processing Inc., the nation’s largest payroll processor with annual revenue of $1.8 billion.

Lundberg, 51, had been president since June, 1987. During his reign, the company was only marginally profitable or losing money. In its fiscal year that ended June 30, Pay-Fone lost $194,682 on revenue of $5.3 million; it lost $202,151 the previous year on revenue of $5.5 million.

The company’s stock, which traded as high as $6 a share in 1987, closed Monday at $2.25 a share in American Stock Exchange composite trading.

Pay-Fone, founded in 1955 by Lewis Greenwood, uses computers to process companies’ payroll accounts, print employees’ paychecks and provide automated tax services.

Ironically, Lundberg became president of Pay-Fone after he and other dissident investors, unhappy with Pay-Fone’s performance in the mid-1980s, launched a proxy fight against Greenwood for control of the company. The group lost, but Greenwood quit in 1987 after selling his 30% stake in Pay-Fone to the dissidents, and Lundberg was named president.