Despite a swathe of rumour that an attempt would be made to unseat chairman Steve Case at Thursday’s board meeting of the world’s largest media group AOL Time Warner [WAMN: 17-Sep-02], the matter of shareholder pressure for his removal was not even discussed.
Recited a spokesman for the group: “Mr Case is the company's chairman and he will remain so,” adding that there had been no discussion of Case or his role. “Contrary to rumors, Steve Case has the strong support of the board.”
Case, an America Online alumnus, negotiated AOL’s merger with Time Warner chairman Gerald Levin (who dutifully fell on his sword last year to pursue an interest in amateur dramatics) and assumed the chair on his departure.
A number of major shareholders in the group – notably Capital Research & Management – believe Case should follow Levin, and there are said to be mirrored murmurings in AOL TW’s executive washrooms expressing anger that Case remains with the company given his identification with the online arm’s creative sales and accounting strategies – both now under criminal investigation.
But Case (44) is cocooned by a contract clause negotiated when Time Warner and AOL merged in January 2000: that a 75% majority of the board is required to dethrone him. This means he needs the support of only three members of the fourteen-strong board to ensure survival.
The clause, however, expires at the end of 2003, by which time (assuming nemesis does not overtake Case beforehand) he too should start rehearsing his lines – perhaps, suggest some cynics, the title role in Shakespeare’s Julius Caesar.
Data sourced from: The Wall Street Journal Online; additional content by WARC staff