Yahoo Investor Criticizes CEO for Embellishing His Education
Yahoo! Inc. (YHOO) investor Third Point LLC, which is fighting for representation on the Internet company’s board, criticized Chief Executive Officer Scott Thompson for an inaccuracy in his educational record.
While Thompson lists a bachelor’s degree in computer science from Stonehill College, the school didn’t begin offering such a degree until four years after he graduated, Third Point CEO Daniel Loeb said today in an open letter to the board. Thompson has an accounting degree from the school, Loeb said.
Yahoo’s board will review the matter and, afterward, “make an appropriate disclosure to shareholders,” the company said. Yahoo 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.”
Third Point, the owner of about 5.8 percent of Yahoo, announced plans in March to seek shareholder votes on its slate of four directors. Yahoo has been struggling to keep pace with rivals Google Inc. (GOOG) and Facebook, which have lured away users and ad dollars. Third Point has demanded changes at Yahoo, calling it one of technology’s “most mismanaged companies.”
In his letter today, Loeb said that Stonehill only had one computer-science course when Thompson attended the Boston-area school. “Presumably, Mr. Thompson took that course,” he said.
Martin McGovern, a spokesman for Stonehill in Easton, Massachusetts, said that Thompson received a bachelor’s of science in business administration, with a major in accounting on May 20, 1979. He declined to comment further.
Thompson’s biography from his time at EBay Inc.’s PayPal unit, as submitted to events such as the 2009 Web 2.0 Summit, also stated that he had a degree in computer science. Anuj Nayar, a spokesman for PayPal, said that in recent EBay filings, Thompson’s degree was listed correctly.
“Under Mr. Thompson’s leadership, Yahoo is moving forward to grow the company and drive shareholder value,” Sunnyvale, California-based Yahoo said in the statement from earlier today.
Loeb said that Patti Hart, a Yahoo board member who chairs the company’s search committee, inflated her degree as well. Hart, who also serves as CEO of International Game Technology (IGT), is listed in filings as holding a “bachelor’s degree in marketing and economics” from Illinois State University, Loeb said. “However, we understand that Ms. Hart’s degree is in business administration. She received a degree in neither marketing nor economics.”
Yahoo said in its response that “Patti Hart holds a bachelor of science degree in business administration with specialties in marketing and economics from Illinois State University.”
Jay Groves, a spokesman for Illinois State, corroborated the business administration degree, saying she graduated in 1978 with a concentration in economics and marketing.
Embellishing resumes has led to executive firings and resignations in the past. In 2009, Intrepid Potash Inc. President Patrick Avery stepped down after confirming he hadn’t received degrees from two universities listed on a company prospectus. RadioShack Corp. CEO David Edmondson resigned in 2006 after acknowledging he hadn’t earned the degrees in theology and psychology that he listed on his resume.
Kenneth Lonchar, chief financial officer at Veritas Software Corp., quit in 2002 after admitting he had lied about having a master’s degree in business administration from Stanford University.
Others kept their jobs. Microsemi Corp. CEO James Peterson was censured and fined after a 2009 review found he’d fabricated degrees fromBrigham Young University, but the company retained him as CEO. In 2002, Ronald Zarrella, CEO of Bausch & Lomb Inc., was found to have listed an MBA from New York University on his resume, when he had only taken classes at its business school. He hung on to his job as well.
Third Point faulted Thompson last month for embarking on a round of job cuts before he articulated a more complete strategy. Thompson, the former president of PayPal (EBAY), took over as Yahoo’s CEO in January.
Yahoo named three new independent directors in March, part of its own effort to shake up the board and appease investors. The company had negotiated with Third Point’s Loeb about adding one of his nominees and another that both sides could agree on. The discussions broke down when Loeb insisted that he himself be added, Yahoo said at the time.
“If misrepresentations were made, they would confirm yet again that Yahoo is in dire need of a complete corporate governance overhaul,” Loeb said today. “As we have asserted repeatedly and forcefully, as Yahoo’s largest outside shareholder and a voice for our fellow investors, we believe the Yahoo board requires fresh, outside perspectives from individuals who have no connection to a failed regime and have the expertise to address the serious challenges facing the company.”
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