Yahoo chief executive resigns, company adds new board members
By Hayley Tsukayama,
Yahoo chief executive Scott Thompson resigned Sunday, amid ongoing questions about his academic credentials. His decision follows more than a week of controversy that leaves Yahoo with a new interim chief executive, three new board members from Yahoo’s largest outside investor, a new board chairman and a serious public image problem.
In a statement, Yahoo said that the company’s global media head, Ross Levinsohn, would take over as interim chief executive for the firm.
Thompson “has left the company,” the release said.
The statement did not mention or offer any explanation of how a false computer science degree made its way into Thompson’s biography, a discrepancy that triggered the tumult that engulfed the company in recent days.
The company also appointed Fred Amoroso, who joined the board in March, as the chairman. Three others joined the board as well, all nominees from the technology firm’s largest outside investor, Third Point.
The resignation and appointments are part of a settlement Yahoo made with Third Point, whose chief executive, Daniel Loeb, has been waging a proxy battle with the company and was the first to levy accusations against Thompson.
Yahoo said in a statement on May 2 that Loeb did “not bring the relevant skill set and experience” to join Yahoo’s board. The statement also expressed the company’s support for Thompson’s leadership. The next day, however, Loeb went public with his accusations about Thompson’s credentials and qualifications.
Now, Loeb, as well as Third Point nominees Harry J. Wilson and Michael J. Wolf, will become Yahoo board members.
Neither Thompson nor Yahoo ever made an official statement addressing the false degree, though media reports indicated that Thompson said he believed the degree had been added into a dossier from a placement firm. He reportedly told employees that he never checked his biography for accuracy. He said that he regretted the oversight and took full responsibility for the error’s duplication.
Yet, according to a report from the Wall Street Journal, Thompson faced new evidence produced by a placement firm that indicated this version of events was not true.
The report from the Journal indicated that Thompson’s health also influenced his decision to step down. Unnamed “people familiar with the matter” told the Journal that Thompson has thyroid cancer — something he had only shared with a handful of colleagues. The former chief executive reportedly said he did not want to make his cancer diagnosis public, but that he has started treatment.
Yahoo’s dramatic move could be the reset button the company needs, analysts said Monday. In a note to investors, Bernstein Research’s Carlos Kirjner and Ram Parameswaran said that they believe the addition of Third Point’s appointees will help steer Yahoo’s management team to better monetize its media content and further focus its path on its core business.
They also said the nominees may strike a deal with Alibaba CEO Jack Ma for Yahoo’s Asian assets. The company owns a large stake in Alibaba, and may sell a portion of that stake to Ma in exchange for “some guarantee of an IPO in the near future,” the analysts said. They expect the changes will be good for Yahoo stock.
Yahoo was up more than 2 percent to $15.52 per share in pre-market trading Monday, after closing down at $15.19 Friday.