Yahoo!, the struggling Internet giant has been caught up in yet another controversy this week. This is regarding its current CEO, Scott Thompson’s inaccurate educational qualifications which were posted on Yahoo’s official website. Scott Thompson had listed that he had received his Bachelor’s in Computer Science and Accounting from Stonehill, Boston in 1979. Shareholders, Third Point have accused the CEO of doctoring his resume as they confirmed independently with the college that this information was false. He, however, does have a Bachelor’s in Accounting from Stonehill.
These accusations were made Dan Loeb, Co-founder of Third Point LLC, who own a 5.8% stake in Yahoo. This is apparently a retaliation by Third Point since Yahoo ignored their choice of nominees to its board. Third Point has filed for the release of documents relating to the hiring of the CEO with the Securities and Exchange Commission.
Dan Loeb wrote in a letter to Yahoo’s board saying, “A rudimentary Google [emphasis original] search reveals a Stonehill College alumni announcement stating that Mr. Thompson’s degree is in accounting only. That announcement is consistent with other documents (including filings with the SEC) that reflect Mr. Thompson received a degree in accounting, but not computer science.”
Yahoo has now setup a special committee to look into this issue which includes Alfred Amoroso, an independent director of Yahoo, John Hayes, American Express Co.’s Chief Marketing Officer, and Thomas McInerney, Former Chief Financial Officer for IAC/InterActiveCorp and Independent Lawyer, Terry Bird. The company had earlier accepted that they had made an ‘inadvertent error’ on the profile page. The revelation sparked a massive outrage over the Internet with many prominent analysts and commentators calling for the resignation of the CEO since he had let Yahoo employees down. Scott Thompson has apologized but has decided not to step down as of yet. Third Point is pushing very hard for his sacking. This will only be decided after the special committee studies this issue.
“The special committee and the entire board appreciate the urgency of the situation and the special committee will therefore conduct the review in an independent, thorough and expeditious manner,” Yahoo! said in a release.
We don’t need to remind you that doctoring educational qualifications is a serious offense professionally and is the cause of immediate dismissal in many companies. Such a thing happening at Yahoo makes us wonder about about Yahoo’s hiring processes. The person responsible for hiring Scott, Patti Hart has said that she will be quitting the board before Yahoo’s next board elections. Yahoo has not been doing very well and this is a major setback in terms of credibility for the company. It has seen 3 CEO’s in 3 years and the stability and leadership of the company is very questionable at this point. Do you think Yahoo will ever reach the peak it once enjoyed?