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Woes waning at TW

With stock rising, meet should be friendlier

NEW YORK — For the first time in years, tempers may flare less and smiles may be sunnier at Time Warner’s annual meeting today — and not just because the event’s being held in Burbank.

Sure, AOL is an issue, so are government investigations and corporate strategy. But the stock has had a good run and chairman-CEO Richard Parsons has nursed the company to solid financial health.

The conglom’s recent annual meetings have been a parade of misplaced hubris, teary goodbyes and angry tirades, depending on the year and mirroring the advance of the ill-fated AOL merger that’s defined Time Warner since the deal was announced in early 2000.

Last May saw heated debate over the makeup of the board of directors as angry shareholders wanted Steve Case and his former AOL cronies to eat crow and leave. Case had resigned as chairman some months earlier under pressure from influential investors including Ted Turner.

Case told shareholders, assembled near AOL headquarters in Landsdowne, Va., that “the last few years have been difficult and disappointing.” But he didn’t cry.

Gerald Levin did, the year before, when he formally resigned as CEO. He choked up, blew kisses and said he’d “just fade away. An old CEO.” Shareholders at the Apollo Theater in Harlem, who’d been hollering minutes before about their decimated savings, didn’t know whether to pick up stones or hankies.

Probably the former: The market value of AOL Time Warner had dropped $50 billion that year.

“I expect this to be a much less contentious meeting than last year’s,” said one investor. “There are questions surrounding the AOL assets and what to do with them, but I don’t see the same level off animosity. There’s been significant double-digit returns to shareholders in the last 12 months, and people tend to vote their pocketbooks,” he added.

The board composition is one issue that may dog Parsons, since a residue of investors would still very much like to see Case and his former AOL advisors Miles Gilburne and Ken Novack hit the road. Case was re-elected last year with 78% of the vote, Novack with 82% and Gilburne with a paltry 65%. (Other directors cleared a more typical 96% or 97%.)

Parsons had acknowledged to reporters after that meeting, “Numbers talk.” But, he said, “I can’t tell you what it means to the board.”

“I suspect the resolution of AOL and the resolution of the guys on the board will be simultaneous,” said one Wall Streeter. He and others believe that if AOL doesn’t show dramatic improvement, the conglom will have to sell it.

Parsons seems to be actively addressing the composition of the board. Early this year, former Harvard Law School dean Robert Clark was named a director. Last month, director Franklin Raines, head of mortgage company Fannie Mae, said he plans to step down, giving Parsons more wiggle room for a new appointment.

Parsons has lowered debt and exited non-core businesses. Now investors are looking for signals as to whether and the company will continue to grow and how, be it through buying Adelphia, snapping up MGM or turning elsewhere.

For Time Warner shareholders, Parsons’ biggest achievement may have come last fall — that’s when he yanked “AOL” from the company’s name.

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