Yahoo Board Said to Meet Over CEO Record Amid Firing Call
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Yahoo! Inc. (YHOO) board members met yesterday to review the academic record of Chief Executive Officer Scott Thompson, a person briefed on the plans said, as investor Third Point LLC stepped up pressure for his ouster.
The company formed a committee of three recently appointed board members to explore discrepancies in Thompson’s resume, said the person, who asked to remain anonymous because the meetings are private. An outside law firm is working with the committee, this person said.
Third Point, which is trying to win seats on Yahoo’s board and has said the company is mismanaged, last week highlighted errors in Thompson’s resume and demanded that he be fired. The fallout marks a setback for Thompson, who had just embarked on efforts to revive growth and help the company do a better job coping with challenges in online advertising and social media from Google Inc. and Facebook Inc. Yahoo’s board fired former CEO Carol Bartz in September amid falling sales.
The biography for Thompson, who joined Yahoo from EBay Inc. (EBAY) in January, listed a bachelor’s degree in computer science from Stonehill College, a credential that wasn’t offered until four years after he graduated, Third Point CEO Daniel Loeb said.
Yahoo’s board said last week that it would review the matter and “make an appropriate disclosure to shareholders.” The company had earlier called the discrepancy an “inadvertent error” and said it “in no way alters that fact that Mr. Thompson is a highly qualified executive with a successful track record leading large consumer technology companies.”
Thompson, in a memo to staff yesterday, apologized for the fallout from the disclosures and said he takes “full responsibility.” He said he’s cooperating with the review.
“I want you to know how deeply I regret how this issue has affected the company and all of you,” Thompson said. “We have all been working very hard to move the company forward, and this has had the opposite effect.”
Dana Lengkeek, spokeswoman for Sunnyvale, California-based Yahoo, declined to comment.
Yahoo shares slid 1.5 percent to $15.11 as of 10:57 a.m. in New York. They had lost 4.8 percent this year before today.
New York-based Third Point demanded yesterday that it be able to inspect records related to Thompson’s hiring, as well as the appointment of director Patti Hart, whose credentials it also questions.
“Yahoo shareholders and employees will be best served if the board accepts responsibility quickly for this latest debacle,” Third Point said in a letter. “If the directors are truly interested in ‘working in a constructive manner with Third Point,’ they should provide answers promptly.”
Thompson has cut 2,000 jobs and overhauled management. The company’s shares had their biggest rally in almost four months on April 18 after Yahoo reported first-quarter sales that topped estimates, fueling optimism that turnaround efforts may take hold. A day earlier, Yahoo reported its first revenue gain in more than three years.
The appointment of the special committee and work with a legal firm was reported yesterday by the Wall Street Journal.
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