As the proxy battle between the Yahoo board of directors and activist shareholder Dan Loeb heats up, new information has come to light that CEO Scott Thompson has some fraudulent credentials. Of course the so called oversight was brought to the Yahoo board’s attention by none other than Loeb himself.
On both Yahoo’s website and in their SEC regulatory filings, Thompson is described as having a bachelors degree in computer science in addition to his accounting degree. Apparently, Loeb and his investment firm, Third Point did some snooping around and found out computer science was not a degree even offered at Stone Hill, the school Thompson graduated from.
Of course Yahoo responded immediately calling the biographical error an “inadvertent mistake” and immediately removed the false credential from whatever public documents they could. The problem is, the error dates back at least six years and even appears on his Ebay bio from his years of work there. So it appears to be more than just an inadvertent clerical error, or whatever they are claiming.
Loeb also called attention to another Yahoo board member’s credentials. Patti Hart, a graduate of Illinois State College, claimed she held a degree in economics and marketing, when in fact her degree is in business administration. very Interesting.
As you can imagine, this has the Yahoo shareholders and the board of directors quite upset. All Things D spoke to someone with knowledge of the climate at Yahoo yesterday and they claim,“ many members of the board are deeply concerned,” and “this is a problem on a lot of levels, especially related to the trust of shareholders”.
Here’s a few segments from the letter to the Yahoo board of directors from Loeb and Third Point:
“Third Point believes Mr. Thompson and Ms. Hart owe Yahoo!, its Board of Directors and its shareholders an explanation. We also call upon the Board to immediately commission an independent investigation to determine whether these individuals (i) made misrepresentations to the Yahoo! Board and the investing public or (ii) have violated the Company’s Code of Ethics. Unless there are satisfactory explanations for these apparent discrepancies, the Board will need to decide whether these two individuals should remain at the helm of Yahoo!”
“However, in the event that there is no good explanation, we expect the Board to take immediate action. Yahoo! shareholders should not have to wait until the (not yet scheduled) Annual Meeting for our nominees to begin the hard work of truly changing the Yahoo! Board.”
So the battle is on, and it looks like Loeb and Third Point have a legitimate issue which should be raised. Are these people who currently run Yahoo competent? It appears they knowingly falsified their credentials to get where they are. Perhaps they are perfectly capable of doing their jobs, but why would it ever be okay to make false accusations about what degrees you hold. We will be watching this story closely. As new information becomes available, you can read about it here.