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AOL Time Warner Chairman Steve Case to Step Down

BY Admin  January 13, 2003 at 2:31 PM EST

Case, the co-founder and former chief of America Online, said in a press statement Sunday that he would “love” to remain as AOL Time Warner’s chairman, but felt his presence would become a “distraction” to the media giant’s financial turnaround.

“Given that some shareholders continue to focus their disappointment with the company’s post-merger performance on me personally, I have concluded that we should take steps now to avoid the possibility of that effort hindering our ability to pull together as a team and focus fully on our businesses,” Case said.

Case notified Chief Executive Dick Parsons and the board of directors over the weekend about his decision to resign, which will be effective as of the annual shareholder’s meeting in May. Case will remain a director on the company’s board.

The resignation comes amid growing investor criticism over AOL Time Warner’s disappointing post-merger financial results. AOL Time Warner stock, which closed at $14.88 on Friday, has plummeted some 80 percent, or around $72 per share, since 2000, when company executives first revealed their plans to create the world’s largest media company by combining Time Warner’s “old media” properties with AOL’s “new media” technology.

In addition to the loss of shareholder value, AOL Time Warner faces a federal investigation by the Securities and Exchange Commission and Justice Department into its accounting practices for advertising deals at America Online.

AOL Time Warner is also expected to report a $10 billion charge later this month for the drop in value of its online assets, after taking a similar $54 billion charge last year.

While America Online is the nation’s most popular Internet service provider, with nearly 35 million subscribers and some $8 billion in annual revenue from user fees alone, its advertising revenue has been declining for several years.

Company officials have not named Case’s successor.

Case’s resignation ends months of speculation amid growing shareholder pressure for the 44-year-old Internet industry pioneer to step down.

On Wall Street, investors welcomed the news, as shares of AOL Time Warner rose 33 cents, or two percent, to $15.21, during late morning tradition on the New York Stock Exchange.