News

Parsons's Moves Consolidate His Power

6/02/2002 8:00 PM Eastern

New AOL Time Warner Inc. CEO Richard Parsons has made some moves to consolidate his power, changing the reporting structure for some top executives at the media giant and creating a new office of the CEO.

According to an internal AOL Time Warner memo, Parsons wrote that the structural changes were part of his overall strategy to "simplify and streamline our organization."

In keeping with that strategy, Parsons wrote that executive vice president of global strategy and policy Robert Kimmitt and chief technology officer William Raduchel, who formerly reported to AOL Time Warner chairman Steve Case, will now report directly to Parsons.

Parsons became CEO on May 16, when former CEO Gerald Levin officially retired. Since December — when Levin announced his intention to leave the company — Parsons had been acting CEO, and has repeatedly told analysts and the media of his five-point plan to get AOL Time Warner back on track.

Those plans are: to reinvigorate the America Online Internet-service provider unit; restore credibility with investors; guard the integrity of the balance sheet; simplify the corporate structure; and re-energize AOL Time Warner employees.

With the structural changes — and an April move to place chief operating officer Bob Pittman in charge of AOL's revitalization — Parsons appears to be well on his way toward implementation of his plan.

The most recent changes also suggest that Parsons is placing a little more emphasis on getting AOL Time Warner's story out to the media.

As part of the restructuring, executive vice president Kenneth Lerer will no longer have direct oversight of corporate communications and investor relations. That responsibility will go to senior vice president of corporate communications Edward Adler, who now reports directly to Parsons,
and investor relations head John Martin, who reportsto chief financial officer Wayne Pace. Adler and Martin had reported to Lerer.

Pace, executive vice president and general counsel Paul Cappuccio, executive vice president of strategy and investments Dolf DiBiasio and executive vice president of administration Pat Fili-Krushel will all continue to report to Parsons.

Lerer, who also is said to be close to Pittman, will join a new office of the CEO, which also includes Parsons's chief of staff, Paul Washington, and Donn Davis, a top adviser to Case.

"Over the past six months, I have come to rely on Kenny's good judgment and counsel," Parsons wrote in the memo. "This change will formalize what Kenny has already been doing for the company informally."

News of the changes in reporting structure came prior to reports of a rift between Case and Pittman over the latter's decision to slash the AOL unit's corporate research and development spending.

Although Pittman has cut costs at the online-services provider as part of his charge to right the unit, a report in the New York Post
last week said that he and Case are at loggerheads over the R&D cutbacks. According to the Post, Case believes that AOL must continue investing to develop new technologies.

An AOL Time Warner spokeswoman declined to comment.

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