Parsons To Head AOL Time Warner
AOL Time Warner Inc. chief executive Dick Parsons was tapped to be the next chairman of the media conglomerate Thursday, less than a week after Steve Case abruptly announced plans to resign.
Case's departure followed widespread investor dissatisfaction with the $106 billion merger of America Online and Time Warner that he helped orchestrate. Parsons, a Time Warner veteran who has headed the combined company for less than a year, had been seen as the most likely successor to Case.
The board's unanimous decision to give Parsons both jobs came despite speculation that the two jobs would be kept separate to ensure sufficient oversight of the company. But the company indicated Thursday that it remains confident its corporate governance measures are adequate.
Parsons' appointment will take effect May 16 at the shareholders annual meeting, the same date Case had indicated he would leave the company.
"I am highly gratified that the board shares my determination to maximize AOL Time Warner's tremendous potential," Parsons said. "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."
The announcement comes a little over two years after the company's big merger was finalized and places AOL Time Warner firmly in the grasp of executives from the Time Warner side of the business.
When Case leaves, the highest ranking executive from AOL will be Paul Cappuccio, the company's general counsel.
Investors had pushed for the changes, following a sharp drop in the company' stock price chiefly caused by problems at the America Online division. Those problems include shrinking revenues and accounting practices currently under investigation by the Justice Department and Securities and Exchange Commission. AOL Time Warner's shares have tumbled roughly 80 percent since the merger was announced in 2000, and more than 60 percent since the deal was completed in 2001.
The announcement came after the end of regular trading. Shares of AOL Time Warner had closed up 6 cents at $15.30 on the New York Stock Exchange. In after-hours dealings, they fell 16 cents to $15.14.