AOL Chief Levin to Step Down
NEW YORK – Almost two years after negotiating the mega-merger that created AOL Time Warner, chief executive Gerald Levin announced Wednesday that he will retire next year from the world's largest media company.
Levin, 62, will be replaced by co-chief operating officer Richard Parsons. While the timing of his departure was something of a surprise to colleagues and industry analysts, it did not appear to be forced or the result of any friction with other executives.
Levin said he simply had accomplished what he set out to do with AOL Time Warner, and is ready to leave the corporate world for other challenges.
He will retire at the company's board meeting in May 2002.
Steve Case will remain as AOL Time Warner's chairman, while the company's other co-chief operating officer, Robert Pittman, will become the sole chief operating officer, the company said in a statement.
Levin had given no previous indication he planned to step down before the usual retirement age of 65. His contract expires in 2003.
However, he revealed that he had a special provision inserted into his employment contract in 1997 after his son, Jonathan, an English teacher, was killed in New York by a former student. The clause allowed Levin not to finish his term as chief executive.
"I felt that once my work was completed and I was satisfied with the company's direction and progress, I'd invoke that provision and turn my full energies to the moral and social issues I feel so passionate about," Levin wrote in an e-mail to AOL Time Warner employees. "That time has arrived."
In a telephone interview, he said was comfortable with the succession plan he worked out with the company's board, and felt it was time to let it begin.
He declined to specify his plans after corporate life, saying only that "there may things I want to write and make and do."
"We're supposed to be suits here who run corporations for 30 years, but actually inside myself I am a creative person," Levin said. "People see me, but they don't truly know me as an individual, and that's what I want to do."
His recent philanthropic donations include the establishment of college scholarships and a $10 million donation to The National Cable Television Center and Museum, all in his son's name. Levin and his wife Barbara, who have a house in Dorset, Vt., also helped fund the restoration of the Dorset Playhouse.
"I might be a player in the Dorset theater," Levin said.
Parsons, 53, is one of the highest-ranking black executives in corporate America. He has been in charge of the company's content businesses, including movie studios, Warner Music Group and Time Warner Trade Publishing.
In an interview, Parsons said there were extensive talks regarding a successor to Levin but that the CEO was never pressured to leave early. He said he learned about Levin's plans only last week.
He said of Levin's future: "Jerry's gonna surprise people, as he always has in his career."
From the 1980's through the start of the new century, Levin was a driving force behind the former Time Inc.'s transformation into a multimedia powerhouse through its combination with music and moviemaker Warner Communications Inc., the acquisition of Ted Turner's cable empire and its merger with Internet behemoth AOL.
The $106 billion deal to merge America Online and Time Warner was announced in January 2000 but took a year complete. It brought together the world's largest online service, which now has more than 32 million subscribers, and a huge media company, with such properties as cable network CNN and HBO, movie studio Warner Bros. and magazine titles such as Time, People, and Sports Illustrated.
"Given that we are almost a full year into the merger and that an outstanding management team is now in place at the company, I am convinced that AOL Time Warner should begin an orderly transition to a new era of leadership," Levin said in a statement announcing his retirement.
Levin, a lawyer, joined Time Inc. in 1972 to help develop a new cable service called Home Box Office. He was instrumental in the 1975 decision to distribute its programs nationally by satellite, a key element in bringing about the development of the modern cable industry.
Following Time Inc.'s merger with Warner Communications Inc. in 1990, he served as vice chairman and chief operating officer. He ascended to the co-CEO role in February 1992 with Steve Ross. When Ross died the following December, Levin took over as sole CEO.
Over the next decade, Levin helped expand Time Warner's scope and scale, including a landmark 1995 deal in which Time Warner bought Turner Broadcasting Systems Inc.
Following the AOL-Time Warner deal, there was speculation over what role Levin might take in the new company, especially as the deal was structured as an acquisition of Time Warner.
AOL-Time Warner is now among several suitors trying to buy AT&T Broadband, the country's largest cable television operator. Levin said his departure had nothing to do with that deal.
"It's an intensely personal decision on my part," he said. "I'm taking a risk, because tomorrow nobody will return my calls."
AOL Time Warner shares rose $1.08, or 3.1 percent, to $35.83 Wednesday on the New York Stock Exchange.