Yahoo CEO Scott Thompson Steps Down After Résumé Flap
Yahoo is cutting ties with CEO Scott Thompson amid controversy over falsified academic credentials on Thompson's résumé.
In a press release on Sunday, Yahoo said Thompson is leaving both his CEO role and his position on the company's board of directors. Thompson became Yahoo CEO in January, replacing Carol Bartz, who was fired from Yahoo in September 2011. Acting as interim CEO "effective immediately" is Ross Levinsohn, the current executive vice president of Yahoo's global media business and former executive vice president of Yahoo Americas.
Yahoo also announced on Sunday that it is settling its pending proxy fight with hedge fund Third Point LLC, Yahoo's largest outside shareholder.
The flap over Thompson's résumé revolves around his assertion that he earned Bachelor's degrees in both accounting and computer science from Boston's Stonehill College. In fact, he earned a Bachelor's degree in accounting only, not computer science. Third Point discovered the discrepancy while examining Yahoo's recent SEC filings, it said in a letter to Yahoo's board dated May 3. Third Point said it confirmed its finding with Stonehill College, which did not begin issuing computer science degrees until four years after Thompson graduated.
"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,"
said Third Point
CEO Daniel Loeb in the letter.
Third Point also criticized the vetting process that led to Thompson's hiring. "Should our concerns about Mr. Thompson's record be accurate, that would call into serious question whether the Board failed to exercise appropriate diligence and oversight in one of its most fundamental tasks -- identifying and hiring the Chief Executive Officer," its letter said.
Additionally, Third Point discovered discrepancies in the academic credentials of Yahoo director Patti Hart, who led the search committee that hired Thompson. Yahoo's SEC filings indicate that Hart holds Bachelor's degrees in marketing and economics, but according to Third Point, Hart's degree is in business administration only.
Hart subsequently announced that she would not seek reelection to Yahoo's board.
Thompson addressed Third Point's accusations in a letter to Yahoo employees dated May 7. "I want you to know how deeply I regret how this issue has affected the company and all of you. We have all been working very hard to move the company forward, and this has had the opposite effect," he wrote. "For that, I take full responsibility, and I want to apologize to you."
On May 8, Yahoo formed a committee to investigate Thompson's credentials. Thompson's exit was announced five days later.
A report from the Wall Street Journal published Monday claims that Thompson has been diagnosed with thyroid cancer, and that the diagnosis also played a role in his exit from Yahoo. Thompson's diagnosis was disclosed late last week, the WSJ said, citing sources "familiar with the matter."
Yahoo has been on the verge of a proxy war with Third Point, which owns a 6 percent share in Yahoo, for several months. Since February, Third Point has pushed the addition of four directors of its choosing to Yahoo's board in an effort to improve the embattled Internet company's fortunes. Under Yahoo's settlement deal with Third Point, three of the hedge fund's four proposed directors will be named to Yahoo's board.