AOL Time Warner chairman to step down

Steve Case will remain board member, CNN parent says

Steve Case will step down officially in May, according to an AOL Time Warner statement.

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NEW YORK (CNN) -- Steve Case will step down as chairman of AOL Time Warner in May. However, he will continue as a board member, the company said Sunday in a news release.

Case was the driving force behind the 2001 merger of then-booming Internet portal America Online and Time Warner, the media giant that owned an array of film, TV, music and publishing companies, to form one of the world's largest media companies.

However, the company has experienced a severe drop in its market value since the merger, which came at the peak of the Internet stock price boom, and disgruntled shareholders had directed their ire at Case.

The move will be made effective at the annual shareholders meeting in May, the statement said.

The company said Case told Chief Executive Officer Dick Parsons and the board of directors of his decision over the weekend. Case will remain on AOL Time Warner's board of directors and co-chairman of its strategy committee.

FACT BOX STEVE CASE:  BORN: 8/21/58 in Honolulu, Hawaii EDUCATION: B.A. in political science from Williams College, Williamstown, Massachusetts BUSINESS CAREER: After graduating in 1980, went to work for Proctor & Gamble marketing hair-care products. Joined Pizza Hut division of PepsiCo in 1982, where he managed new pizza development Joined Control Video as marketing assistant in 1983 In 1985, with colleagues from Control Video, launched Quantum Computer Services, which focused on providing online service for Commodore computer users. Later included Apple and Tandy users In 1991, held a competition for a new name for the company and picked America Online -- his own entry Became CEO in 1992 and took the company public, using the $66 million raised to catch and pass rivals CompuServe and Prodigy AOL reached 17 million members in 1999, up from 200,000 members in 1992, and launched a $106 billion takeover bid for Time Warner Inc -- the largest stock merger in history -- which was approved by government regulators in early 2001

"This decision was personally very difficult for me, as I would love to serve as chairman of this great company for many years to come, and as an architect of the merger I have felt it was important that I stay the course as chairman and help get things on track," Case told the board, according to the AOL Time Warner statement.

"However, after careful consideration, I believe stepping down is in the best interest of the company, for three reasons. First, this company does not need distractions at this critical time, and given that some shareholders continue to focus their disappointment with the company's post-merger performance on me personally, I have concluded that we should take steps now to avoid the possibility of that effort hindering our ability to pull together as a team and focus fully on our businesses.

"Second, important progress has been made over the past year in building a new foundation for the future ... Given this progress and the fact that we're moving into more of an execution phase, this seems like an appropriate time for me to announce that I will step aside.

"Third, I have concluded that I can continue to make a significant contribution even after I step down as chairman by remaining a director and continuing to co-chair the strategy committee," Case said.

The founder of AOL concluded, "The bottom line is this: I love the company and will do whatever I can to make it successful. I believed in America Online when we built it; I believed in AOL Time Warner when we created it; and I continue to believe in the great potential of this company and its people."

AOL Time Warner Vice Chairman Ted Turner said in a statement, "I admire Steve Case's decision to put our company and its employees first, and I am delighted that he will remain on the board and be active because frankly, we really need his experience and vision."

Parsons said, "I have valued partnering with Steve and am pleased he will continue to be active as a director even after he steps down as chairman in May. His extraordinary vision and unique experience will be invaluable, and I look forward to working with him for years to come."

Case's decision was "reached entirely on his own," Parsons said in a statement e-mailed to employees. "It's Steve's view that this is the best way to ensure we all can focus full attention on carrying out the strategy for growth which he's helped put in place."

He added, "His decision is driven solely by his belief that it is, at this time, best for the company, and the best way to ensure that we all do come together and create a bright and prosperous future."

The announcement is the latest in a string of resignations of top company personnel since the merger.

Parsons took over after Gerald Levin, who with Case helped engineer the merger, resigned in December 2001, telling CNN, "I want the poetry back in my life."

Robert Pittman, who served as AOL Time Warner's sole chief operating officer, resigned last summer.

AOL Time Warner stock closed at $14.88 on Friday, up from its 12-month low of $8.70 but still far below the $50 level that it reached after the merger.

Both the Securities and Exchange Commission and the Justice Department are investigating the company's accounting practices. (Full Story)

AOL Time Warner is the parent company of CNN.

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