The news came following a board of directors meeting at company headquarters that ended at 5 p.m. -- after the stock markets closed. Mr. Parsons' appointment, which the board reached unanimously, is effective May 16, the day of the company's annual shareholder meeting.
Mr. Parsons, who replaced Gerald Levin as CEO after last year's shareholder meeting, replaces Steve Case as chairman, who earlier this week said he was giving up his position.
Of the top echelon of executives at AOL Time Warner when it was newly merged, Mr. Parsons has not only endured -- unlike Messrs. Case, Pittman and Levin -- but he's still held in high regard among company executives.
"It's a good choice," one of them said following the decision. "He's done a good job leading the company through a difficult period."
Roles for other execs
A spokeswoman said the responsibilities of Jeff Bewkes and Don Logan, who split oversight of the company's far-flung properties as chairmen of its two operating groups, the Entertainment and Networks Group and the Media and Communications Group, respectively, would not be broadened or changed in the wake of today's announcement.
However, the company executive speculated that Messrs. Bewkes and Logan are likely to assume additional responsibilities, and that Mr. Parsons' dual role may only represent an interim move.
In a post-Enron world, investors have expressed concerns over centralizing so much corporate decision-making in the hands of one individual. But an AOL Time Warner spokeswoman wrote in an e-mail that "We have a very active board of directors comprised of management and non-management directors and we have measures in place ensure that corporate governance remains a top priority for our board."