and work with our strategic partners to achieve ambitious goals.”
Even President George W. Bush is a fan of Parsons’ leadership prowess. When he appointed the executive to serve as co-chair of a commission to overhaul Social Security last May, he said: “Richard Parsons is one of the leaders of this nation’s information age economy. Few people have served more tours of duty in the American government and business…[He] represents, in our time, the spirit of business statesmanship at its highest.”
A TIME FOR CHANGE
When the $106.2 million AOL — Time Warner merger — the largest such transaction in history — was completed roughly a year ago, there had been much speculation about the company’s future leadership. Analysts say that even though the recent management shuffle came as a shock, word is that Levin had been quietly planning his retirement for as long as a year, consulting with board directors and executives to devise a transition plan.
Why now? Maintains Scott Kessler, a securities analyst at Standard & Poor’s: “My impression is that the transitional plan was just [delayed] by the fact that you had an economic downturn that was affecting the company. My guess is that [Levin] would’ve probably announced his plans to leave before he did, but he didn’t because of a lot of things that were happening in the economy and in the Internet sector.”
A TIME FOR BOLD LEADERSHIP
With the company basking in the glow of the success of New Line Cinema’s Harry Potter & the Sorcerer’s Stone (which grossed $219.7 million in its first three weeks), and the anticipated success of the movie adaptation of J.R.R. Tolkien’s Lord of the Rings: The Fellowship of the Ring, Kessler says the investment community is thinking more positively about AOL Time Warner, allowing Levin to step down without leaving on a sour note. And Wall Street also liked the news, surprise or not. AOL (NYSE: AOL) stock gained 1.08, or 3.11%, to close at $35.83 on December 5, the day of the announcement.
Over the past year, the buzz was that Robert W. Pittman, co-COO and Parson’s equal at the company, would be Levin’s heir presumptive. In fact, a cover of BusinessWeek hailed Pittman and Chairman Steve Case as “Men of the Century.” In his position, Pittman oversaw AOL and Time Warner’s cable systems, magazines, cable channels, and the WB network — roughly 86% of the company’s expected 2001 cash flow. Parsons, on the other hand, was responsible for the content business — primarily filmed entertainment and music — and all corporate staff functions, including financial and legal activities.
The board, however, viewed Parsons as the better executive. Industry watchers say he was picked over the more visible and vocal Pittman because of his experience in running a large global business, knowledge of regulatory issues, and contacts in Washington, D.C., having been a corporate attorney and a senior White House aide under President Gerald Ford.
Under the new management structure, Pittman will serve as the company’s sole COO, and all division CEOs will report to him. He, in turn, will