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Richard Parsons, who takes over as AOL Time Warner CEO next year, doesn't trumpet his skills. Others do it for him.
By SARA FRITZ
© St. Petersburg Times, published December 11, 2001
WASHINGTON -- AOL Time Warner executive Richard D. Parsons and former Sen. Daniel Patrick Moynihan came together recently for a news conference to explain the work of the Social Security commission that they co-chair.
Within minutes, Moynihan, a retiree and noted intellect, grew impatient with the questions. He either did not know the answers or did not want to spend his time sharing them with the media. Abruptly, Moynihan declared an end to the news conference and marched out of the room.
But Parsons, who had just flown into Washington from an overseas business trip, stayed behind. Patiently, he answered every question, no matter how detailed or insignificant. He even volunteered a polite explanation for Moynihan's rudeness, noting that the former New York senator had been involved in developing a different element of the proposal.
It is that combination of graciousness and grasp of detail that last week won Parsons the top job at AOL Time Warner, the world's largest media company. Early next year, he will replace Gerald Levin as the company's chief executive.
Many corporate chieftains display their leadership style only to colleagues and business partners behind the closed doors of mahogany-paneled office suites. But Parsons' work on the panel assigned to retool Social Security provided a very public case study in the skills of conciliation that got him to the top of the world's largest media company.
Parsons, who is 6-foot-4 and sports a pleasant, relaxed smile, is one of a very few black men to hold such a lofty position in American business.
Those who worked with him in Washington are not surprised by his promotion from co-chief operating officer. Members of the Social Security commission, which is scheduled to complete its final report to President Bush today, say Parsons' leadership skills enabled the group to reach agreement on complex, politically sensitive issues.
"He is the finest leader I have come across on all my days," said commission member and public policy expert Leanne Abdnor of Boulder, Colo., former executive director of the Alliance for Worker Retirement Security.
Parsons has a similar reputation in New York, where he has worked quietly behind the scenes since 1995 to assist Levin in expanding the size and profitability of Time Warner, before and after its merger with America Online. In fact, Parsons has only one known critic, but a prominent one: New York Mayor Rudy Giuliani, with whom he has tangled repeatedly.
When President Bush chose Parsons this year to co-chair the Social Security commission, it generated speculation that the AOL Time Warner executive was ready to move into politics. A moderate Republican whose first mentor was Nelson Rockefeller, Parsons might have made an attractive Cabinet member for Bush.
But Parsons, who has previously turned down offers to run for office, including governor of New York, has once again chosen business over politics. As CEO of AOL Time Warner, whose holdings include news gathering organizations, he says he cannot indulge in overt partisanship.
Parsons might be out of place in elected office anyway because, by all accounts, he hates disagreement.
"He has a wonderful way of bringing people together, and articulating the concerns of people with differing views," said Gerald Pozen, another commission member and vice chairman of Fidelity Investments. "He's an honest broker. He makes people feel that he is being fair and straightforward and there's no behind-the-back thing going on."
These days, Parsons, who earned nearly $8-million last year, regularly travels in plush private jets and runs his own Tuscan vineyard as a hobby. Yet he never seems to dwell on either his current success or his childhood in New York City's impoverished Bedford-Stuyvesant neighborhood.
"He seems unaffected by power," Abdnor says.
When the Social Security commission meets, Parsons arrives quietly without an entourage and chats casually with everyone in the room -- members, journalists, even the lobbyists who oppose the panel's plan to divert some Social Security payroll taxes to create private investment accounts for American workers.
Although Parsons has carried the primary leadership burden of the commission, he always bows to Moynihan's experience and expertise on Social Security. At 78, the former New York senator has a tendency to interrupt the commission's discussion to recall a long-forgotten fact from the 1930s when Social Security was created.
Tom Saving, a Texas college professor, Social Security trustee and perhaps the most conservative member of the commission, said that despite Parson's gentle nature, he is tough with those who stray from this agenda.
"He knew when to press people who wanted to deviate from the president's principles," Saving said. "He wasn't going to tolerate that. There were times when he had to get up and say, "This isn't what we're trying to do.' "
Business analysts say Parsons' skill in such situations will be essential as he juggles some of the biggest egos in American business, including AOL Time Warner chairman Steve Case, who cofounded America Online, vice chairman Ted Turner and MTV creator Robert Pittman, AOL Time Warner co-chief operating officer. Pittman, who was passed over for the top job, says Levin showed good judgment in making him number two.
While Pittman makes the day-to-day decisions, Parsons is expected to play the diplomat, both within the vast and often contentious media company and with politicians and regulators outside.
In New York City politics, Parsons' nemesis, Giuliani, will soon be out of office. Although Parsons helped Giuliani win election, the two men had a falling out when Time Warner's New York cable system briefly stopped carrying the Disney Channel during a contract dispute. Giuliani also tried without success to get the cable system to carry Fox's cable network. Now, Parsons serves on the transition team of Mayor-elect Michael Bloomberg.
Success is nothing new for Dick Parsons.
After skipping two grades in high school, he went to the University of Hawaii, then on to Albany Law School, where he finished first in his class. By his own account, he got good grades despite his preference for parties and sports.
Because of his achievement in law school, he caught the eye of then-New York Gov. Rockefeller, who took him to Washington in 1974. Before joining Time Warner in 1995, he worked as a lawyer along with Giuliani at the New York firm of Patterson, Belknap, Webb and Tyler, then as president of Dime Savings Bank.
In every position, including his volunteer job as head of the Social Security commission, he has proven to be a quick study. Parsons opposed any efforts by members of the commission to avoid the volatile issues of trimming Social Security benefits or adding tax revenue to stabilize the financial soundness of the trust fund, which will be operating at a deficit by 2006.
"Every time we made a difficult decision," Abdnor recalled, "Dick would say, "Let's be clear, let's be honest, let's be up front about this.' "
What struck many of Parsons' colleagues on the commission was his insistence on changing the rules of Social Security to provide new financial protection for low-wage workers and divorced women. The two groups often suffer most in retirement.
Under the commission proposal, low-wage workers would be guaranteed a retirement income of no less than 120 percent of the official poverty wage, and women upon divorce are promised 50 percent of the wealth that accumulated in their joint investment accounts during marriage.
Abdnor thinks Parsons' background gave him an appreciation of these problems. After his family moved from Bedford-Stuyvesant, Parsons' father was a technician with Sperry Rand on Long Island; his mother was a homemaker. They had five children.
Parsons became something of a hero to the other members of the Social Security panel who are black or Hispanic. Fidel Vargas, vice president of Reliant Equity Investors, says he looks on Parsons' appointment as CEO of AOL Time Warner as a good omen for minority executives.
"It's a great example of what's happening in corporate America," Vargas said. "I hope it's an indication of what's ahead."