Yahoo’s beleaguered CEO Scott Thompson is out, in a shakeup that replaced the company’s chairman of the board and added new directors chosen by a dissident shareholder.
Unable to ride out the storm over a false academic degree listed on his resume, Thompson left the company over the weekend. Yahoo issued a statement Sunday mentioning Thompson’s name briefly, and only in connection with announcing his replacement, Ross Levinsohn, as interim CEO. Levinsohn was Yahoo’s executive vice president and head of global media.
The decision to replace Thompson over his false claim of holding a degree in computer science jelled late Friday, after search firm Heidrick & Struggles denied it had anything to do with the falsification. In meetings he held to attempt to calm the waters last week, Thompson blamed a staffer at an unnamed headhunting firm for making the resume mistake, which he failed to notice for eight years.
Headhunting firm denies allegations
That firm would have been Heidrick & Struggles, which was handling his placement at eBay.
That did it, for the normally reserved firm. “The CEO of Yahoo! has made potentially damaging allegations about our firm that are simply not true and cannot be allowed to stand in the public record,” wrote CEO Kevin Kelly in a letter to company staff. He aded:
The media articles in question have indicated that the Yahoo! CEO told members of his senior staff that, many years ago, a junior member of our firm invented an academic credential for him in the course of preparing standard profile materials. Based on information in our possession, this allegation is verifiably not true and we have notified Yahoo! to that effect.”
That information reportedly is a resume Thompson gave the company.
According to a report on All Things Digital, which posted a copy of the Heidrick & Struggles letter, a similar letter was sent to Yahoo’s board.
No large severance package for outgoing CEO?
What’s not discussed in the letter or in articles about the Heidrick & Struggles letter is whether the firm did a background check on Thompson to verify the information. Heidrick & Struggles has not yet returned a call asking about that.
What is clear is that dissident shareholder Third Point and its founder, Daniel Loeb, did look into Thompson’s background. In the last several weeks, Loeb learned that Thompson’s alma mater, small Catholic Stonehill College, did not even offer a computer science degree until four years after he graduated — with an accounting degree.
Loeb and Third Point, which was waging a proxy fight with the Yahoo board, called for Thompson’s resignation because of the falsification.
That proxy battle ended Sunday, when Yahoo agreed to appoint three Third Point nominees to its board. Board Chairman Roy Bostock stepped down, as did four other members.
In a different post, All Things Digital said Thompson won’t be getting the usual large severance package that typically is given to ousted executives. Instead, the Yahoo board intends to say he left for cause. It’s relying on a clause in his letter of offer requiring him to “abide by the Company’s policies and procedures.”
On the other hand, if Thompson’s departure was voluntary — and The Wall Street Journal says his recent diagnosis of thyroid cancer may have helped him decide to leave — then he may be obligated to return the $7 million he was given in upfront bonuses. His employment offer says he has to return the money if he leaves voluntarily within a year of his hiring.