AOL Time Warner Returns Director Nominee Slate Amid Shareholder Flack

May 15, 2003 ( - Despite criticism that some of its board members were not independent and that its shareholders can't put up new director candidates, media giant AOL Time Warner elected its approved candidate slate of 13 nominees for board slots.

A Bloomberg news report said three other company proposals, including ratifying Ernst & Young as AOL Time Warner’s auditor, were adopted. Two shareholder proposals were defeated, Chief Executive Richard Parsons said at the company’s annual meeting today in Virginia.

Parsons vowed he would improve the struggling company’s performance, “stabilize” its America Online unit and reduce debt to $20 billion by the end of 2004. “We’re working hard to repair our credibility with investors,” Parsons said at the meeting, according to Bloomberg. “My objective is to rebuild value for you, our shareholders.”

Parsons, named chairman at the meeting, faced shareholders angered by the company’s 26%-stock decline in the past year, an investigation into its accounting and a $98.7 billion loss in 2002.

Four board nominees with ties to America Online received the lowest percentage of votes in favor of their election. Former chairman Steve Case was reelected with 78% of the votes cast while Miles Gilburne, a former America Online executive, got the lowest vote with 65%.

Jim Barksdale, who ran Netscape Communications when America Online purchased it, was returned to the boardroom with 79% of the votes. Ken Novack, vice chairman of AOL Time Warner who held that position at America Online before its purchase of Time Warner, was reelected with 82% in favor, AOL Time Warner officials said.

Some of AOL Time Warner’s largest shareholders, including Capital Research & Management and the California Public Employees’ Retirement System (CalPERS) had said they would withhold votes for some board members.

Shareholders including the American Federation of State, County and Municipal Employees Pension Plan today told Parsons that the company should give shareholders more power to nominate board members. Parsons attacked the notion. “I don’t think it’s a very good idea,” he said, according to Bloomberg “The obligation of the board is to represent all of the shareholders, not some 3% of shareholders that may have an agenda that’s different from the rest.”