At Time Warner's (NYSE:TWX) annual shareholder meeting in Atlanta, Chairman Richard Parsons hinted he'll probably be stepping down from his position by the end of 2008. That would make the decision of current CEO Jeffrey Bewkes much easier in whether to stay with Time Warner or not.
In his contract when signing on with Time Warner, Bewkes has a clause which allows him to retire if he isn't named chairman within a year of his being hired. There is a deadline date of January 1, 2009 for the board to make a decision.
Parsons commented at the shareholder meeting, "I know I am leaving the company in good hands," seeming to imply he's definitely going to leave at that time.
For Bewkes, he plans on bringing the focus of the company back to its entertainment assets and AOL by getting rid of the 84 percent stake it has in Time Warner Cable Inc. (NYSE:TWC). Many applaud that, but question why AOL isn't on the front burner of divestation as well.
In the first quarter AOL plunged in profit by 74 percent, while only generating advertising sales growth of 1 percent.
"They've really got to get rid of AOL," Porter Bibb, a managing partner at Mediatech Capital Partners LLC in New York, said. "If they don't unload AOL, this company is going to be mired in the low teens."
Parson spent much of his time at Time Warner fighting to bring the company back to profitability by selling off assets and cutting costs. He will get a base pay of $1.5 million this year, with the possibility of a cash bonus of $2.9 million and restricted stock and stock options aimed at $3.2 million.
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