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Yahoo sweeps out CEO tainted by inaccurate bio
Source: Agencies |
May 14, 2012, Monday
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YAHOO swept out Scott Thompson as CEO yesterday in an effort to clean up a mess created by a misleading resume that destroyed his credibility as he set out to turn around the long-troubled Internet company.
Ross Levinsohn, a 48-year-old executive who oversees Yahoo's media and advertising services, is taking over as interim CEO.
Yahoo lured Thompson away from eBay's PayPal in January to end a financial funk that has depressed the company's stock for years. Although Yahoo remains one of the Internet's most-visited websites, the company's financial and stock performance has suffered in the face of competition from companies like Google and Facebook. The company's foibles have exasperated investors who have seen Yahoo go through four full-time CEOs in less than five years without delivering on repeated promises to revive its revenue growth.
Thompson's abrupt exit after just four months came as part of the latest shake-up on Yahoo's board of directors, which has been in a state of flux for several months.
Yahoo Chairman Roy Bostock and four other directors who had already announced plans to step down at the company's annual meeting later this year are leaving the board immediately. All five of those directors signed off on the hiring of Thompson, a move that made them all look bad by the recent revelation that they didn't catch an inaccuracy that had been circulating about his educational background for years.
Three of Yahoo's vacated board seats will be filled by activist hedge fund manager Daniel Loeb, a disgruntled shareholder who dropped the bombshell that led to Thompson's departure, and two of his allies, former MTV Networks executive Michael Wolf and turnaround specialist Harry Wilson.
Alfred Amoroso, a veteran technology executive who joined Yahoo's board just three months ago, replaces Bostock as chairman. After all the changes have been finalized, Yahoo will have 11 board members.
The appointment of the new directors ends a potentially disruptive battle with Loeb, who was waging a campaign to gain four seats on the company's board. Loeb wound up settling for three board seats and the satisfaction of ushering out Thompson, who antagonized Loeb in late March by telling him he wasn't qualified for the board.
In a statement issued through Yahoo, Loeb said he is "delighted" to join the Yahoo board and promised to "work collaboratively with our fellow directors." Loeb's fund, Third Point LLC, has invested about $1 billion to build a 5.8 percent stake in Yahoo.
Although Yahoo Inc. gave no official explanation for Thompson's departure, it was clearly tied to inaccuracies that appeared on Thompson's biography on the company's website and in a recent filing with the Securities and Exchange Commission.
The bio listed two degrees - in accounting and computer science - from Stonehill College, a small school near Boston. Loeb discovered Thompson never received a computer science degree from the college and exposed the fabrication in a May 3 letter to Yahoo's board. The revelation raised questions about why the accomplishment had periodically appeared on his bio in the years while he was running PayPal, an online payment service owned by eBay Inc.
Yahoo initially stood behind Thompson, brushing off the inclusion of the bogus degree as an "inadvertent error," but harsh criticism from employees, shareholders and corporate governance experts prompted the board to appoint a special committee to investigate how the fabrication occurred.
"Yahoo has a circuitous way of getting to the right answer, but I believe they have gotten to it," said Stifel Nicolaus analyst Jordan Rohan.
Ross Levinsohn, a 48-year-old executive who oversees Yahoo's media and advertising services, is taking over as interim CEO.
Yahoo lured Thompson away from eBay's PayPal in January to end a financial funk that has depressed the company's stock for years. Although Yahoo remains one of the Internet's most-visited websites, the company's financial and stock performance has suffered in the face of competition from companies like Google and Facebook. The company's foibles have exasperated investors who have seen Yahoo go through four full-time CEOs in less than five years without delivering on repeated promises to revive its revenue growth.
Thompson's abrupt exit after just four months came as part of the latest shake-up on Yahoo's board of directors, which has been in a state of flux for several months.
Yahoo Chairman Roy Bostock and four other directors who had already announced plans to step down at the company's annual meeting later this year are leaving the board immediately. All five of those directors signed off on the hiring of Thompson, a move that made them all look bad by the recent revelation that they didn't catch an inaccuracy that had been circulating about his educational background for years.
Three of Yahoo's vacated board seats will be filled by activist hedge fund manager Daniel Loeb, a disgruntled shareholder who dropped the bombshell that led to Thompson's departure, and two of his allies, former MTV Networks executive Michael Wolf and turnaround specialist Harry Wilson.
Alfred Amoroso, a veteran technology executive who joined Yahoo's board just three months ago, replaces Bostock as chairman. After all the changes have been finalized, Yahoo will have 11 board members.
The appointment of the new directors ends a potentially disruptive battle with Loeb, who was waging a campaign to gain four seats on the company's board. Loeb wound up settling for three board seats and the satisfaction of ushering out Thompson, who antagonized Loeb in late March by telling him he wasn't qualified for the board.
In a statement issued through Yahoo, Loeb said he is "delighted" to join the Yahoo board and promised to "work collaboratively with our fellow directors." Loeb's fund, Third Point LLC, has invested about $1 billion to build a 5.8 percent stake in Yahoo.
Although Yahoo Inc. gave no official explanation for Thompson's departure, it was clearly tied to inaccuracies that appeared on Thompson's biography on the company's website and in a recent filing with the Securities and Exchange Commission.
The bio listed two degrees - in accounting and computer science - from Stonehill College, a small school near Boston. Loeb discovered Thompson never received a computer science degree from the college and exposed the fabrication in a May 3 letter to Yahoo's board. The revelation raised questions about why the accomplishment had periodically appeared on his bio in the years while he was running PayPal, an online payment service owned by eBay Inc.
Yahoo initially stood behind Thompson, brushing off the inclusion of the bogus degree as an "inadvertent error," but harsh criticism from employees, shareholders and corporate governance experts prompted the board to appoint a special committee to investigate how the fabrication occurred.
"Yahoo has a circuitous way of getting to the right answer, but I believe they have gotten to it," said Stifel Nicolaus analyst Jordan Rohan.
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