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.
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.
I think it's something we should adapt in the United States.
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