Will Yahoo fire its CEO?
A disgruntled shareholder discovers that Scott Thompson's resume doesn't hold up.
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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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?
Did Loeb ever consider that people do go on after graduating and pick up specific credits and experience that converts to credits in lines that complement their youthful education.
Loeb just wants his piddly 5.8% share to appear to be 58%, so he is just plain full of bull sh*t!
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