AOL Time Warner Inc. ended nearly one week of rampant speculation surrounding
who would take the place of outgoing chairman Steve Case, naming CEO Richard
Parsons to both posts late Thursday.
Parsons had been one of several candidates bandied about for the chairman's
role after Case abruptly announced his resignation Sunday.
Speculation as to who would assume the chairman's spot ran the gamut from
Parsons and AOL Time Warner vice chairman Ted Turner to several AOL Time Warner
board members, including former Major League Baseball commissioner Fay Vincent,
mortgage lender Fannie Mae chairman and CEO Franklin Raines, Netscape
Communications Corp. cofounder James Barksdale, Colgate Palmolive Co. chairman
and CEO Reuben Mark and Hilton Hotels Corp. president and CEO Stephen
Bollenbach.
Viacom Inc. president and chief operating officer Mel Karmazin was also
rumored to be in line for the CEO spot -- which AOL Time Warner denied -- with
Parsons becoming chairman.
That all became moot after the daylong board meeting Thursday. Parsons'
appointment -- unanimously approved by the board -- will take effect May 16.
"I am delighted by this decision and look forward to working with Dick to
ensure a smooth transition," Case said in a prepared statement.
The move was expected, as Parsons is a highly respected executive known for
his diplomatic demeanor.
In light of recent troubles at AOL Time Warner -- including its declining
stock price, shrinking revenue and subscriber counts at its America Online Inc.
online unit and a federal investigation into some of AOL's accounting practices
-- that management style should come in handy.
Parsons' appointment may also go a long way toward easing some board
dissension at AOL Time Warner. Turner was said to have teamed up with two large
shareholders -- Liberty Media Corp. chairman John Malone and Capital Research
& Management Co. senior vice president Gordon Crawford -- to force Case out
in September.
Parsons had reached out to Turner shortly after he became CEO last May to
make Turner more active in management issues.
"I am highly gratified that the board shares my determination to maximize AOL
Time Warner's tremendous potential," Parsons said in a prepared statement. "As
we address the challenges facing our company and the industries in which we
operate, I will work together with the extraordinary people in this company to
focus on increasing value for our customers and our shareholders."
AOL Time
Warner, in its statement, also tried to quell any corporate-governance concerns
regarding the combination of the chairman and CEO posts.
The board said it is continuing its strong corporate-governance measures,
which include executive sessions of all nonmanagement directors without the CEO
and other management present.
"These executive sessions are held in conjunction with every board meeting
and are chaired in each instance by the nonmanagement director, who serves as
chairman of the appropriate board committee," the board said in the
statement.
