The Telegraph
Since 1st March, 1999
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Parsons ahead at AOL

New York, Jan. 16: As the directors of AOL Time Warner prepare for the full meeting of the company’s board on Thursday, Richard D. Parsons, the chief executive, is emerging as the most likely successor to chairman Stephen M. Case when he steps down in May.

Several people close to the board said the final decision would depend mainly on the wishes of Parsons himself, who they said will keep his chief executive duties.

If he does not want to be chairman, Parsons could guide the board to name another director as a non-executive chairman. That would be a division of duties, which some investors argue, helps make managers more accountable to shareholders and the board.

But such an outcome would not significantly diminish Parsons’ power. The company’s fallen stock price has already stirred AOL Time Warner’s directors to more vigilance, and Parsons would have a strong hand in choosing the chairman.

The board is under some pressure to name a new chairman soon to bring stability to the company after a string of resignations at the top. But it may not make a decision on Thursday or even for months.

Parsons has declined to comment, saying he deferred to the decision of the board. Several people involved in the board’s meetings said that if Parsons does not get the chairmanship, the board is also almost certain to select one of its current members to ensure continuity.

But that is an unlikely outcome because most of the directors either have other commitments or lack sufficient support from the board.

For example, one director whose name has come up in preliminary discussions is James Barksdale, 59, the former chief executive of Netscape and the former chief operating officer of Federal Express, people involved in the deliberations have said.

Barksdale, who came from the AOL board before it acquired Time Warner, is widely respected among the other directors from both sides of the merger. And he is currently unencumbered by a major executive role at another company. But he lacks a strong background running a media company and his former position at Netscape might bring back unpleasant memories of the internet boom.

Fay Vincent, another director and the former commissioner of baseball, is also free of commitments but does not have enough support from the board.

Other candidates who could appeal to the board because they are currently running successful business are unlikely to leave those companies to become a non-executive chairman. Stephen F. Bollenbach, 60, chief executive of Hilton Hotels and the former chief financial officer of Disney, could not be reached for comment.

Reuben Mark, 63, chairman and chief executive of Colgate-Palmolive, has also been discussed by some directors, but one person involved said he is very unlikely to leave Colgate-Palmolive. And Franklin Raines, chairman of Fannie Mae and another successful executive, has said publicly that he is not interested.

One question on the minds of some institutional investors is the future role of the core directors from AOL now that Case has resigned as chairman under shareholder pressure. Case remains a director, and so do his long-time advisers Kenneth Novack and Miles Gilbourne.

Some shareholders said they are watching the board’s deliberations for clues about whether the old battle lines that divided the company after the merger may persist on the board, too.

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