SOUR RESPONSE TO STEVE CASE RESIGNATION

AOL Time Warner Veterans Express Resentment and Anger

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NEW YORK (AdAge.com) -- Reaction to Steve Case's resignation as chairman of AOL Time Warner echoed through the hallways and e-mail in boxes of the media giant, with flashes of anger peeking through executives' comments.

Accused of 'profiteering'
"From most parts of the business, there's no love lost," said one senior executive from the Time Warner portion of the company. "His vision coupled with his profiteering" -- press reports held that Mr. Case sold more than $100 million of company stock after the merger -- "while everyone else got hammered, I think, didn't endear him" to non-AOL staffers.

"[Former CEO Gerald] Levin, in spite of how many people were disappointed in his last flourish, he did not profit from it," the executive said. (Reports of Mr. Levin's financial setbacks surfaced in today's New York Times.)

"You don't get that from Steve Case," this executive concluded.

"I admire him for making this

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decision," said another company executive, who added Mr. Case "didn't have a hands-on feel for the other businesses" at AOL Time Warner.

Upcoming board meeting
AOL Time Warner will hold one of its regularly scheduled board meetings Jan. 16, and one AOL executive said that, theoretically, there might have been a no-confidence vote at the meeting, and that Mr. Case stepped down ahead of it.

However, an AOL Time Warner spokeswoman said, "Steve Case was not on the agenda at this board meeting."

"This signifies closure in this chapter of Time Warner's evolution," said Soundview Technologies analyst Jordan Rohan, who insisted on referring to the company by its pre-merger name.

Muddied reporting lines
Mr. Rohan also said structural changes at AOL may be easier to accomplish without Mr. Case, although Mr. Case will continue to stay on the board after he leaves his current post in May. A company executive, picking up this theme, said Mr. Case's continued involvement in the company put new America Online Chairman-CEO Jonathan Miller in an awkward position. Mr. Miller reports to Don Logan, chairman of the company's Media and Communications Group, but Mr. Case's presence muddied reporting lines, an issue which Mr. Logan addressed in an interview with the New York Times last week.

AOL, which continues to be a drag on company performance, is expected to go through more intense cost-cutting under Mr. Miller.

Ted Turner
Speculation runs rampant concerning who may replace Mr. Case in May. A sort of populist favorite, Vice Chairman Ted Turner, is considered too colorful a character to take the helm, though his name frequently surfaces. As the company's largest single shareholder and a board member, though, Mr. Turner is expected to play a key role in selecting Mr. Case's successor.

CEO Richard Parsons also has surfaced as a potential replacement. Some note, though, that Mr. Parsons has not yet been chief executive for a year, and that should his position change, his current responsibilities would need to be divided among other senior company executives such as Mr. Logan and Jeff Bewkes, chairman of the company's Entertainment and Networks Group.

A replacement is expected to be named by mid-March, in order meet deadlines for proxy statements necessary for the company's annual meeting in May.

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