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AOL has choice of chairman
Board of AOL Time Warner has numerous executives with chairman experience who can succeed Case.
January 13, 2003: 2:32 PM EST

NEW YORK (CNN/Money) - The AOL Time Warner board is chock full of former or current company chairmen from which it can choose a successor to Steve Case when he gives up the chairman title later this year.

Company spokeswoman Tricia Primrose said Monday there is no plan or comment yet for succession plans for Case, who will give up the chairman position before the May shareholders' meeting, although he will remain on the board.

Time Warner veteran Richard Parsons, who became CEO of the combined company last year, would appear to be positioned to assume the top board position as well, though he actually is one of the board members never to have been chairman of a company. CNN/Money is a unit of AOL Time Warner.

"I think Dick is certainly capable of doing both jobs, and we'd certainly be happy with him being named," said Oakmark Funds portfolio manager Bill Nygren, a partner at Harris Associates, which holds about 40 million AOL Time Warner shares, or a shade less than 1 percent of the stock. "But we also wouldn't be upset if the board chose someone else."

However, in an age of heightened attention to corporate governance issue, there is a move toward separating the CEO and chairman positions within a company, said Beth Young, special projects director for The Corporate Library, a tracker of corporate governance issues.

"There's a lot more attention being given to board leadership than there was a couple of years ago," said Young. "We've seen with the corporate scandals and crisis in investor confidence an increased attention to the monitoring function of the board."

Last week The Conference Board, an independent business research group, released a study that urged companies to separate the chairman and CEO posts. The committee that made the proposal was led by John Snow, the Treasury Secretary designate who himself holds both positions at CSX Corp.

AOL has two directors with the vice chairman title -- Ted Turner and Ken Novack.

Turner, former CEO and chairman of Turner Broadcasting, is the largest individual shareholder of AOL Time Warner, with a 3.6 percent stake in the company due to Time Warner's purchase of his company in 1996. He was also a frequent critic of Case, although he issued a statement praising him Monday. He was not available for comment about whether he is interested in the chairman post.

Novack, the former vice chairman of America Online, is a lawyer who assumed a lead role in closing a number of acquisitions by AOL. But he owns a relatively modest 4,850 shares of the company, according to the company's last proxy statement.

Outside members of the board, who might also be considered for the chairman post include Franklin Raines, CEO and chairman of mortgage lender Fannie Mae, who joined the America Online board in 1998, and James Barksdale, venture capitalist and co-founder of Netscape, who joined the AOL board when it bought Netscape in 1998.

Barksdale owns 5.5 million shares of AOL Time Warner, according to the proxy, second only to Turner and Case, while Raines owns only 1,000 shares.

Other outside directors with chairman experience include: Reuben Mark, the chairman and CEO of Colgate Palmolive Co. (CL: Research, Estimates); Michael Miles, former chairman and CEO of Philip Morris Co. (MO: Research, Estimates); and Daniel Akerson, who will be stepping down as CEO of bankrupt XO Communications when its financial restructuring is complete. Mark and Miles came to the board from Time Warner's board of directors.  Top of page

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