Yahoo CEO quits amid false claim in bio

Scott Thompson will be replaced temporarily by the company's global media chief. Four board members are also stepping down.

By Kim Peterson May 13, 2012 4:15PM

Updated: 8:20 p.m. Sunday

 

Another CEO is gone at Yahoo (YHOO).

Scott Thompson has resigned from the company after a prolonged scandal over his college degree. Thompson was busted by a major shareholder who discovered that he did not earn a bachelor's degree in accounting and computer science from a small New England college.

 

Stonehill College in Eaton, Mass., didn't even offer computer science degrees until four years after Thompson's graduation.

The discovery was made by Daniel Loeb, whose company, Third Point, owns nearly 6% of Yahoo shares. Loeb had been agitating for changes on Yahoo's board. Once he found the error in Thompson's bio, he went in for the kill. He called numerous times for Thompson to step down, and in the end he got his way.

And Yahoo found itself in the painful position of admitting that Thompson's bio 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 tried to calm the waves. Thompson apologized to employees, saying the error originated with a corporate recruiting firm. But the efforts proved futile.

 

Yahoo has struggled to find CEOs who can succeed. Since the turn of the century, the company has now gone through five CEOs: Tim Koogle, Terry Semel, co-founder Jerry Yang, Carol Bartz and now Thompson.

 

Yang stepped aside in January 2009. Bartz succeeded Yang a few weeks later. She was fired in September 2011.


Yahoo said Sunday that Thompson will be replaced on an interim basis by Ross Levinsohn, the company's head of global media. The company isn't stopping there. It handed Loeb a major victory, adding him to the board in a major shakeup.

Chairman Roy Bostock is stepping down immediately. He will be replaced by Fred Amoroso. Four other board members are also stepping down: Patti Hart, VJ Joshi, Arthur Kern and Gary Wilson. Hart, by the way, was caught up in "résumégate" as well after Loeb questioned the bachelor's degree in marketing and economics on her bio. Yahoo admitted Hart's degree was in business administration.

Two of Loeb's handpicked candidates are also joining the board: restructuring guru Harry Wilson and media expert Michael Wolf. And Third Point will now drop its proxy fight and back the company.

Yahoo's board approved all the changes Sunday in a one-hour conference call, The Wall Street Journal reported.

Thompson was on the job for only four months -- barely enough time to get up to speed. He came to Yahoo in January after heading up the PayPal division at eBay (EBAY). He quickly 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.

Will this board shakeup finally save Yahoo? The company has been in a leadership void for years and has struggled to compete against Google (GOOG) and Microsoft's (MSFT) Bing service. The board fired Bartz in September in an ugly encounter that Bartz later recounted to Fortune. (Microsoft owns and publishes MSN Money.)

The problems with Yahoo are deep and go beyond the CEO position. The board has been called the worst in corporate America, and the changes announced Sunday at that level are far more significant than the removal of the CEO.

Yale business professor Jeffrey Sonnenfeld takes Thompson and the board to task in the following video.

Tags: YHOO
4Comments
May 14, 2012 7:30AM
avatar
I thought these CEOs were supernatural gods, deserving substantially more than their multi million dollar salarys. Please dont tell me they are just dumb ****s like everyone else. How am I going to accept the free market dogma pucked out by our corporate funded think tanks? you broke my heart!!!!
May 14, 2012 1:35AM
avatar
These golden parachutes that the 1% have set up for each other especially if they lie to get hired, should ire Yahoo shareholders.  If he does get a golden parachute they should vote off the board members.  A new hire would have been FIRED, but because he is one of the 1% he'll leave with something.  Don't vote for the board of director!!  Oust them all.


May 14, 2012 7:10AM
avatar
I am learning about different cultures, and the other day, one of my Japanese friends told me that in Japan, if someone in a high task or position (such as a high ranking businessman or CEO), commits crime or shameful act, the apology is to commit suicide, it is something that has been passed since antiquity.
I think it's something we should adapt in the United States.  Smile


May 14, 2012 12:42AM
avatar
How many millions of dollars will he exit with? Most big companies hire an outside source to audit and internally check everything and everybody at least on a yearly basis.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

115
115 rated 1
269
269 rated 2
445
445 rated 3
614
614 rated 4
684
684 rated 5
678
678 rated 6
608
608 rated 7
454
454 rated 8
310
310 rated 9
138
138 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
ARCPAMERICAN REALTY CAPITAL PROPERTIES Inc10
BIDUBAIDU Inc10
CITCIT GROUP Inc NEW10
HPQHEWLETT PACKARD CO10
ITUBITAU UNIBANCO BANCO MULTIPLO S.A.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.