Yahoo CEO leaves after CV controversy
Yahoo CEO Scott Thompson has left the company after scrutiny into inaccuracies on his biography and in company filings.
Thompson, the former head of eBay’s PayPal, leaves the role just four months after he took up the job. Ross Levinsohn, who oversees Yahoo's content and advertising services, is taking over as interim CEO. He becomes the fourth person to run Yahoo in eight months.
Thompson's exit was encouraged by Third Point, the activist hedge fund that owns nearly six per cent of Yahoo shares. Third Point claimed Thompson had exaggerated his CV with a degree in computer science from Stonehill College.
Thompson did earn an accounting degree from Stonehill, a Catholic school near Boston, in 1979, a fact that Yahoo correctly lists, but did not earn a computer science degree.
Third Point's CEO, Dan Loeb, and two of the hedge fund's other nominees will join the Yahoo board. Five directors who had planned to leave later this year will now leave immediately. Interim CEO Levinsohn is someone that Loeb had suggested for the job.
In a statement issued through Yahoo, Loeb said he was "delighted" to join the Yahoo board and promised to "work collaboratively with our fellow directors".
Yahoo gave no official explanation for Thompson's departure, but it was clearly tied to inaccuracies that appeared on his biography on the company's website and in a recent filing with the Securities and Exchange Commission.
The CV listed two degrees - in accounting and computer science - from Stonehill College. 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.
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 dumped its previous CEO, Carol Bartz, in September, disappointed that she had not been able to increase revenue. When Thompson came on board, he made big changes immediately. Co-founder Jerry Yang left the board in January. Thompson announced a reorganisation and planned to lose 2,000 workers, or about 14 per cent of the workforce
But Third Point, which had pushed for Yang to leave and applauded Bartz's dismissal, was still not satisfied. On May 3, it issued a press release with what turned out to be an explosive accusation: Thompson had embellished his CV.
Privately, Thompson told his colleagues that he was not responsible for the incorrect information and blamed a Chicago headhunting firm, Heidrick & Struggles.
In an internal memo last week, Heidrick & Struggles denied Thompson's accusation. "This allegation is verifiably not true and we have notified Yahoo! to that effect," CEO Kevin Kelly wrote to employees.
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