A disgruntled Yahoo shareholder questioned the qualifications and integrity of recently hired CEO Scott Thompson after exposing a misrepresentation about the executive’s education.
The fabrication confirmed on Thursday by Yahoo Inc. gives New York hedge fund manager Daniel Loeb more artillery as he tries to topple a board of directors favoured by Mr. Thompson, who became CEO of the troubled Internet company four months ago.
Mr. Loeb, whose fund Third Point owns a 5.8 percent stake in Yahoo, gained more leverage when he discovered Mr. Thompson doesn’t have a bachelor’s degree in computer science from a small college in Easton, Massachusetts, as Yahoo stated in a regulatory filing last week.
Mr. Thompson only has an accounting degree from Stonehill College, an accomplishment that Yahoo also listed in the filing. The accounting degree was the only listed in Mr. Thompson’s resume last year by eBay Inc. when he was still running that company’s PayPal payment service.
Yahoo confirmed Mr. Thompson’s credentials had been exaggerated in the filing with the Securities and Exchange Commission, and brushed it off as an “inadvertent error.”
But Mr. Loeb pounced on the misinformation as a violation of Yahoo’s code of ethics and called for an independent investigation to determine whether Mr. Thompson had misled the company’s board about his technology credentials. He also cited the mix-up as an example of Yahoo’s poor corporate governance.
“If Mr. Thompson embellished his academic credentials we think that it 1) undermines his credibility as a technology expert and 2) reflects poorly on the character of the CEO, who has been tasked with leading Yahoo at this critical juncture,” Mr. Loeb wrote in a letter to Yahoo’s board on Thursday. “Now more than ever Yahoo investors need a trustworthy CEO.”
In the past, other companies have suspended or fired executives who were caught lying on their resumes.
The company stood behind Mr. Thompson in its statement. “This in no way alters that fact that Mr. Thompson is a highly qualified executive with a successful track record leading large consumer technology companies,” Yahoo said. “Under Mr. Thompson’s leadership, Yahoo is moving forward to grow the company and drive shareholder value.”
