Time Warner Shareholders Get Restless

Music and memorabilia from the Warner Bros. classic “Casablanca” greeted Time Warner Inc. stockholders Thursday at the company’s annual meeting at the studio lot in Burbank.

One clear message from the meeting: As time goes by, a lot of the shareholders are getting restless.

Time Warner Chief Executive Gerald M. Levin was peppered with questions from shareholders, whose complaints included the company’s sluggish stock price, the string of severance agreements paid fired executives, whether the pending $7.5-billion acquisition of Turner Broadcasting System Inc. is a wise deal and whether “Loony Tunes” character Porky Pig offends stutterers.

Levin expressed confidence that the company’s acquisition of Turner would go through and that the company would weather both the legal challenge from partner US West Communications Inc., which sued to stop it, and from federal regulators, who are mulling opposing the deal for antitrust reasons if significant changes aren’t made.

He also said Time Warner’s financial results are improving substantially. As for the Turner deal, Levin said the boost in cash flow for Time Warner will more than offset the stock dilution and increased debt that would result from the deal.

Still, more than a third of shares voted at the meeting cast their proxies in favor of a resolution doing away with the company’s staggered terms for directors, while nearly 18% voted to support a resolution calling for an outside director to serve as chairman. Although neither resolution passed, the results were surprisingly strong given that Time Warner directors had urged stockholders to vote them down. Stockholders usually overwhelmingly support director recommendations.

Asked by one stockholder if he would resign if the Turner deal falls apart, Levin emphatically replied “No.” Levin also called an “over-generalization” one stockholder suggestion that he isn’t respected on Wall Street as company CEO.

But Levin weathered the storm and a host of other questions and suggestions, including one that Time Warner’s stock certificates feature “Looney Tunes” and other characters. As for Porky Pig, Ira Zimmerman, who represents an organization of people who stutter, urged that Porky Pig say, “That’s all, folks!” for the last time because he offends people who stutter.

Levin said the company meant no harm, adding that studies have found Porky Pig has been a role model to young stutterers because he was always involved in something productive.

In New York Stock Exchange trading Thursday, Time Warner closed at $41.875, up 25 cents.