Hedge fund wants Yahoo! CEO ousted
A hedge fund with a large stake in Yahoo! on Friday demanded the immediate ouster of chief executive Scott Thompson, saying he had lost credibility by misrepresenting his educational background. The move by the investment fund Third Point stepped up an ugly battle over control of the struggling Internet pioneer. Third Point, which failed to win an accord for a slate of Yahoo! board members, said inaccuracies on the bios of Thompson and independent director Patti Hart should be cause for their removal. Yahoo! acknowledged Thursday an "inadvertent error" in the CEO's online bio, which wrongly indicated that he had a degree in computer science. It said Hart, who had claimed a bachelor's degree in marketing and economics from Illinois State University, actually had a business administration degree with a specialty in marketing. "While we appreciate the board's statement late last night that it would conduct an investigation, unfortunately, for this board and this company, it is too little and months too late," Third Point said in a letter. "Irreparable damage to Yahoo!'s culture will continue every day that the board allows Mr Thompson and Ms Hart to remain at the helm of the company after having clearly demonstrated that they lack even the 'minimum qualifications for service.'" It set a deadline of noon Monday, saying the board should "terminate Mr Thompson for cause immediately given his demonstrable unsuitability... and accept the resignation of Ms Hart for similar reasons." Thompson "cannot possibly have any credibility remaining with the all-important Yahoo! engineers, many of which earned real 'not invented' degrees in computer science," the letter said. Responding to the latest demand, Yahoo! said it was continuing its review. "The board is reviewing this matter and, upon completion of its review, will make an appropriate disclosure to shareholders," a company statement said. Until late Thursday, the company's website had said Thompson had received a bachelor's degree in accounting and computer science from Stonehill College. Yahoo! later admitted, however, that Thompson had received a bachelor of science degree in business administration with a major in accounting from Stonehill. Yahoo! appointed Thompson in January, hoping the former head of online payments site PayPal, a division of eBay, could revive the Internet giant, which has been losing the battle over online ads. The revelation about Thompson also prompted Yahoo! investor Eric Jackson of Ironfire Capital to join the call for the CEO's removal. "I think Thompson's got to go," he told the San Jose Mercury News. "Putting shareholders aside, I don't know how any engineer at Yahoo! could listen to that guy from now on and not think in the back of their mind, 'Why in the heck would you make up that you studied computer science?' It's going to be completely distracting. "Maybe he can reconstruct his reputation somewhere else." Third Point, led by activist investor Daniel Loeb, claims to own 5.8 percent of Yahoo! shares. The company's board has repeatedly rejected a slate of directors that includes Loeb. Third Point also said it wants details on "the process by which (Yahoo!) vetted Mr Thompson as a potential CEO candidate" and information about whether any other board member "was aware of Mr Thompson's deception prior to receipt of Third Point's letter yesterday." Hart led the search committee that picked Thompson.
