Source: Sydney Morning Herald – www.smh.com.au
Yahoo CEO Scott Thompson says he is sorry for allowing an inaccuracy about his education to appear in his official bio, but not remorseful enough to heed calls for his resignation. In a memo sent Monday to the troubled internet company’s employees, Thompson apologised for the uproar caused by the misinformation. Yahoo provided a copy of the memo to The Associated Press. The memo didn’t offer any explanation why Thompson’s bio has periodically listed a bachelor’s degree in computer science that he never received.
Thompson’s note of contrition came on the same day that an activist hedge fund that owns a 5.8 stake in Yahoo escalated its effort to oust the CEO for unethical conduct. Yahoo’s board is investigating the circumstances that led to the exaggeration about Thompson’s education.
The hedge fund made a legal demand for internal records about the embattled internet company’s hiring of Thompson, after it accused Thompson of lying on his resume. Third Point LLC took that unusual step Monday as part of its effort to oust Thompson for an inaccuracy about his academic credentials. Even before he joined Yahoo four months ago, Thompson’s bio has periodically listed the bachelor’s degree in computer science. The exaggeration was most recently repeated in an April 27 filing with the Securities and Exchange Commission.
After exposing the fabrication last week, Third Point set a noon US Eastern Time deadline Monday for Yahoo to fire Thompson for unethical conduct. That deadline passed without any change in Thompson’s status. Several experts in corporate ethics and board governance have said the deception regarding Thompson’s education probably merits ending his short reign as CEO.
The push to get him fired is unfolding against the backdrop of Third Point’s campaign to gain four seats on Yahoo’s board. Daniel Loeb, who runs Third Point, believes he and three allies could help boost Yahoo’s revenue and long-sagging stock price if they were appointed to the board. Third Point wants to review Yahoo documents that may explain how much research the company’s board did about Thompson before hiring him in January. The fund contends it’s entitled to the records under the laws of Delaware, where Yahoo is incorporated. Yahoo, which is based in Sunnyvale, California, didn’t respond to requests for comment.
After initially brushing off the misinformation as an “inadvertent error,” Yahoo’s board decided to open an investigation into the circumstances that led to the degree being included on Thompson’s bio. Yahoo has promised to share its findings with shareholders when the board completes its inquiry.
Third Point, which has invested about $1 billion to acquire a 5.8 per cent stake in Yahoo, wants to do its own digging into the matter. Besides demanding the internal records leading to Thompson’s hiring, Third Point is seeking documents on the selection of six directors. Five of them have been appointed since Yahoo hired Thompson. They are: Peter Liguori, John Hayes, Thomas McInerney, Maynard Webb Jr. and Fred Amoroso. Third Point also wants records concerning the appointment of Patti Hart to the board in 2010. Hart led the committee in charge of the search for new directors after co-founder Jerry Yang resigned from the board in January and four other members announced they would step down later this year.
Third Point also wants Hart to resign from the board because of an inaccuracy that the hedge fund uncovered on her bio. Hart’s bio had claimed she held a bachelor’s degree in marketing and economics. After being confronted by Third Point, Yahoo clarified that Hart graduated from Illinois State University with a bachelor’s degree in business administration with specialties in marketing and economics.