In a major adjustment of the power structure atop the world's largest media and entertainment company, AOL Time Warner (AOL) CEO Jerry Levin said Wednesday morning he will retire in May 2002.
The retirement of Levin, whose career at the conglomerate began with a job at Home Box Office nearly 30 years ago, gives investors plenty to chew over as they speculate about the future of AOL Time Warner, formed just a year ago.
The management changes sparked by Levin's departure also supply fodder for the soap opera that inevitably arises from any business combination touted, like America Online's and Time Warner's, as a merger of equals. With executives labeled inside and outside the company as Time Warner folks or AOL people, despite the company's best efforts at unity, the question arises as to whether Levin's departure will upset what has appeared to onlookers as a stable balance between the media giant founded by Henry Luce and the Internet powerhouse built up by Steve Case.
Levin himself has proven to be a rugged survivor of such battles, having emerged at the top of Time Warner a decade ago amid the demise of a once-well-crafted succession plan devised for the merger of the former Time Inc. and Warner Communications.
Immediate investor reaction to the latest news was muted Wednesday morning, with AOL's stock rising 27 cents, or less than a percentage point, to $35.02.
At the end of the six-month transition plan envisioned in AOL Time Warner's Wednesday announcement, co-chief operating officer Richard Parsons -- a longtime Time Warner executive -- will become CEO of the company, while the company's other co-COO, Bob Pittman -- a former Time Warner exec lately who was on the AOL side of the merger, will become the solo holder of the COO title. Case will remain AOL Time Warner's chairman. Under the new management structure, the company says, Pittman will report to Parsons, as will other executives currently reporting to Levin. All the CEOs of the company's divisions will report to Pittman.