PARSONS IN PLACE JUST IN CASE
According to several published reports, people close to the board said the final decision would depend mainly on the wishes of Parsons himself, who they said would 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. This would be a division of duties that some investors argue holds managers more accountable to shareholders and the board, The New York Times reports. But such an outcome would not significantly diminish Parsons's power.
Some observers say that should Parsons wear both Chairman and CEO hats, it might be for only a short time while the board seeks a new CEO in a calmer climate. One front-runner is insider Jeffrey Bewkes, former head of the company's Home Box Office channel recently promoted to oversee cable channels, the movie studio and music under Parsons, the Los Angeles Times reports.
Another name that surfaced was that of Viacom President Mel Karmazin. The New York Post reported Wednesday that AOL Time Warner is in serious negotiations to hire him.
Because the company's fallen stock price has already stirred AOL Time Warner's directors to be more vigilant, 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. Indeed, three of the four architects of the AOL Time Warner merger have now been removed from the company. Just over a year ago, Gerald Levin quit as Chief Executive of the combined entity after clashing with Case. Last summer, Robert Pittman left amid increasing criticism of his management style. And, just last week, Chairman Case announced his resignation, leaving Parsons as the lone deal maker.
But the board may not make a decision today or even for months. Several people involved in the board's meetings said that if Parsons did not get the chairmanship, the board was 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 do not have enough support on the board, The New York Times said.
For example, one director whose name has come up in preliminary discussions is James L. Barksdale, the former Chief Executive of Netscape and the former COO of Federal Express. Barksdale, who was on the AOL board before it acquired Time Warner, is widely respected among directors from both sides of the merger, The New York Times says. And he is currently unencumbered by a major executive role at another company. Fay Vincent, another director, the former commissioner of Major League Baseball, is also free of commitments but does not have enough support from the board.
The New York Times says other candidates like Hilton Hotels’ Stephen Bollenbach, Colgate-Palmolive’s Reuben Mark or Fannie Mae’s Franklin D. Raines, who could appeal to the board because they are currently running successful businesses are unlikely to leave those companies to become a non-executive chairman.
