Time Warner CEO May Step Down Next Week
Richard Parsons feeling pressure to exit before contract expires
by Meredith Davis
Time Warner Inc., the world’s largest media and entertainment company with $42.9 billion in revenues in 2006, may be seeing a change in leadership sooner than expected. Speculation has increased about the early departure of Richard Parsons, 59, the CEO and chairman of the board of the entertainment conglomerate, with industry analysts saying that it could be as soon as next week.
While long rumored to be leaving, Parson’s contract is not due to expire until May 2008. A call to a Time Warner spokesperson was not immediately returned. Jeffrey Bewkes, Time Warner’s president and chief operating officer is the front-runner for the CEO post.
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Parsons assumed the top spot at Time Warner in May 2002, two years after its merger with America Online, now considered as one of the worst performing media mega-mergers. Parsons, a New York native, also took on the title of chairman of the board in May 2003 after Steve Case of AOL stepped down.
The company’s stock price languished after the merger and has remained stagnant since. News of Parsons’ potential early exit caused Time Warner’s stock price to rise 4% to $18.46 today; a near high for the day but a low for this year after reaching about $23 in January.
In late 2005, billionaire investor Carl Icahn, whose company owns a 3.3% stake in the media company, rallied for a breakup of the mega-company, but killed his campaign early last year once Parsons agreed to a stock buyback that buoyed the stock price some.
Investors should be keyed into a company’s leadership because changes can give clues to the direction of the company. Time Warner Inc. businesses include interactive services, cable systems, filmed entertainment, television networks and publishing. (SOURCE)