Britt: The Time Was Right

Time Warner Cable Chief Said Succession Plans Started As Early As 2008
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Battling a bout of laryngitis no doubt brought on in part by countless requests to reflect on his 12-year tenure as chief executive of Time Warner Cable, Glenn Britt said the decision to retire at the end of this year was one that he has thought long and hard about for nearly five years.

“I started talking to the board about my eventual retirement and succession planning as early as 2008,” Britt said in an interview Thursday. “Obviously one subject is what’s the right timing, which means, what’s the right timing for me personally and also what’s right for the company? I do think that 12 years is a pretty long time. I do think CEOs should rotate out before too long.

“I’m 64; next March I’m going to be 65,” Britt added. “It was the right time for me.”

During his tenure Time Warner Cable has more than tripled annual revenue from $6 billion to $21 billion, completed a wildly successful spinoff as a pure play cable company in 2009, and has quadrupled its stock price.   

He added that the next question is who would succeed, him and in chief operating officer Rob Marcus, who has steadily moved up the ranks since becoming chief financial officer of the company in 2007, he found the perfect candidate.

“We started grooming Rob about three years ago when he became president and obviously we were watching him before that” Britt said. “He and I have had a long time to work together on this little handoff and I think it has gone as well as anybody could imagine.”

He added that Marcus has all the qualities of a top-notch chief executive.

“Rob has uncommonly good common sense and good judgment,” Britt said. “That is probably the most important attribute for a CEO and he’s got that in spades.”

Britt will continue in a non-executive role on TWC board of directors after he retires in December. He said he has a broad range of interests, but hasn’t decided just what he will pursue after his retirement.

Marcus has a long history with Time Warner Cable. He joined its predecessor company Time Warner Inc. in 1998, after a seven year stint at its top mergers & acquisitions adviser, New York law firm Paul, Weiss, Rifkind, Wharton & Garrison. He was named Time Warner Cable chief financial officer in 2008, becoming chief operating officer in 2010.

Marcus moves into the corner office at a critical time for Time Warner Cable. The second largest MSO in the country has stumbled in the past several quarters as more customers than expected have left the company after a heavy promotional period. While the company and Marcus have made steps to rectify the situation – they have abandoned the use of heavy promotions – the company also has been the recent target of consolidation-minded Charter Communications and one of its largest shareholders, Liberty Media chairman John Malone.

In an interview Thursday, Marcus would not comment on specific companies, but said TWC’s past strategy to maintain its investment grade rating and focus on shareholder returns is still a top priority.

“Neither of us has ever suggested that there isn’t potential value in consolidation,” Marcus said. “The question is how you go about it.”

He added that Time Warner Cable’s acquisitions strategy is as it has always been – the company will be disciplined in its approach, and will evaluate the use of capital for potential deals compared to the alternative uses such as buying back stock.

“That’s not going to change,” Marcus said.    

Marcus said that among his top priorities as chairman and CEO will be to ensure the customer is the focus of everything the company does – he said establishing an emotional connection with subscribers is critical to success – and to reinvigorate a corporate culture that is more performance oriented.

“We need to continue to be willing to reinvent ourselves,” Marcus said.

Analysts were pleased with Marcus selection, adding that he is a well-respected executive with a reputation for integrity and honesty.

“Rob has always been very highly regarded by Wall Street,” said Moffett Research founder and senior media analyst Craig Moffett.  “He's whip smart, he's a straight shooter, and he has already helped make shareholders an awful lot of money over the past few years.”

But Moffett added Marcus’ journey won’t be an easy one.

“Rob is in a tough spot,” Moffett added.  “TWC's stock price already prices in a relatively high probability of a deal with Charter.  That gives Rob a lot less room to maneuver.”