Yahoo CEO Scott Thompson resigned Sunday amid controversy over mentions on his resume and in regulatory filings of a computer science degree he never received. The Internet giant tapped Fred Amoroso to serve as chairman of the Board of Directors and Ross Levinsohn as interim CEO and announced a settlement with the activist investor who pushed for Thompson’s ouster after disclosing the alleged inaccuracies in his stated academic credentials.
Under the settlement agreement with Daniel S. Loeb’s Third Point LLC investment firm, three Third Point nominees -Loeb, Harry J. Wilson, and Michael J. Wolf-will join the Yahoo board of directors as of Wednesday. Third Point will withdraw its planned proxy fight to elect an entirely new slate of directors for the Yahoo board at its upcoming annual meeting.
In a statement, Loeb said: “Harry, Michael and I are delighted to join the Yahoo board and work collaboratively with our fellow directors to foster a culture of leadership dedicated to innovation, excellence in corporate governance, and responsiveness to users, advertisers and partners. We are confident this Board will benefit from shareholder representation, and we are committed to working with new leadership to unlock Yahoo’s significant potential and value.”
The ouster of Thompson after less than six months in the post adds to the turmoil that has enveloped Yahoo, which has had four CEOs in less than five years.
At various times, published summaries of Thompson’s academic background have included a computer science degree from Stonehill College. Thompson earned an accounting degree from Stonehill, a Catholic school near Boston, in 1979. He did not earn a computer science degree. Yahoo correctly lists that information in his biography.
Yahoo hired Thompson, the former head of eBay’s PayPal, in January to help orchestrate a turnaround. Though, Yahoo is one of the Internet’s most-visited websites, the company has struggled to grow in face of competition from the likes of Google and Facebook. The company’s difficulties have irked investors.
Loeb, a vocal critic of Yahoo’s management, discovered Thompson’s resume discrepancy and publicly demanded that Thompson be fired.
The flap over Thompson’s inaccurate bio earlier claimed its first casualty — Patti Hart, the Yahoo director who oversaw the search that culminated in his hiring. Hart is to step down at Yahoo’s still-unscheduled annual meeting later this year.
Thompson’s resume’ discrepancy might have been more forgivable at a company that was making money for shareholders, said James Post, a management professor at Boston University.
“Yahoo has been embattled for such a long time that there are a lot of people prepared to believe the worst about that company,” said Post, who specializes in corporate governance and professional ethics. “When you’re angry at the management and the board, when nothing’s going right and you’re losing money, it’s understandable that shareholders would adopt an ‘off with their head’ attitude.”