Will Yahoo fire its CEO?
A disgruntled shareholder discovers that Scott Thompson's resume doesn't hold up.
By Kim Peterson May 4, 2012 1:24PM
Updated 5:30 p.m. ET - Now, Loeb is calling for Thompson to be fired by Monday.Yahoo's (YHOO) board of directors was caught between a resume and a hard place Friday after its new CEO was busted for providing incorrect information about his education.
Scott Thompson told everyone he got a bachelor's degree in accounting and computer science from Stonehill College in Eaton, Mass. But one of Yahoo's major shareholders researched Thompson's resume and found that Stonehill didn't even offer computer science degrees until four years after Thompson graduated. D'oh!
Armed with that information, the shareholder -- hedge fund manager Daniel Loeb -- fired off a letter to Yahoo and the media suggesting that Thompson lied (read the letter here). If he did, Loeb wrote, it undermines his credibility as a technology expert and reflects poorly on his character.
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"Now more than ever, Yahoo investors need a trustworthy CEO," Loeb wrote. He also questioned the bachelor's degree in marketing and economics held by Patti Hart, a director on Yahoo's board. Loeb said his research found that Hart's degree was in business administration.
And Yahoo found itself in the painful position of admitting that Thompson's resume was wrong. Thompson got a bachelor's degree in business administration with a major in accounting, the company said, calling it "an inadvertent error." Yahoo said that doesn't change the fact that Thompson is a highly qualified executive with a successful track record. Yahoo said Hart's degree was also in business administration.
Thompson came to Yahoo in January after heading up the PayPal division at eBay (EBAY). Within months, he decided to slash 2,000 positions, or 14% of the workforce. In a letter to employees, he said the move would make the company smaller, nimbler and more profitable.
That didn't placate Loeb, whose company, Third Point, owns nearly 6% of Yahoo shares. Loeb has been agitating for change on Yahoo's board and even introduced his own slate of directors that he plans to present at the company's next shareholder meeting.
Loeb wrote that he wants Yahoo to investigate whether Thompson lied or violated the company's code of ethics. If there are no satisfactory explanations, Loeb added, the board needs to decide whether Thompson should continue to be CEO.
Loeb also raises a good question. Why didn't Yahoo vet its executives? And it wasn't just Yahoo either. This bio for Thompson at eBay also referenced the computer science degree.
Now, Yahoo's board must decide how to handle the situation, which doesn't look to be going away. Does Yahoo keep Thompson -- sending a bad message to already discouraged employees and investors -- or boot yet another CEO? The board fired previous CEO Carol Bartz last September in an ugly encounter that Bartz later recounted to Fortune. The company has had leadership problems for years.
What do you think, readers? Should Thompson stay or go?
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5Comments
May 4, 2012 2:20PM
May 4, 2012 2:44PM
Intentional lies and misinformation are grounds for dismissal; in that case he should be fired. Clearly, if he lied about this matter what other lies, errors, and omissions exist in relation to his alleged successful track record?
There seems to be a double standard when it comes to the executive suite. The rank and file are held accountable, but such a requirement does not seem to hold for the senior leadership roles.
He lacks the integrity to lead this company; how can the organization trust him?
There seems to be a double standard when it comes to the executive suite. The rank and file are held accountable, but such a requirement does not seem to hold for the senior leadership roles.
He lacks the integrity to lead this company; how can the organization trust him?
May 4, 2012 3:07PM
May 4, 2012 5:17PM
I've got MSN, Google and Yahoo on my pc. One for IE, one for Chrome and one for Firefox. Don't care for IE but I hate Yahoo. Nothing seems to work right there. Only reason I even go there is my facebook comes on with one click. No password needed. Probably could rig that up on my favorite, Chrome/Google but being lazy I'd just as soon gripe about what a waste Yahoo is.
May 4, 2012 2:33PM
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