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Another CEO departs troubled Yahoo
Resume-enhancement flap forces out Thompson after just 4 months on job
Question of the Day
The struggling Internet company had hoped that Mr. Thompson, who became CEO is January, would turn things around. But he now becomes the fourth CEO to leave Yahoo in five years. He is being replaced by Yahoo’s global media chief, Ross Levinsohn.
Mr. Thompson’s exit was encouraged by Third Point, the activist hedge fund that owns nearly 6 percent of Yahoo shares. Third Point claimed that Mr. Thompson had padded his resume with a degree in computer science from Stonehill College. Mr. Thompson did earn an accounting degree from Stonehill, a Catholic school near Boston, in 1979, a fact that Yahoo correctly lists. But he did not earn a computer-science degree.
Third Point’s CEO, Dan Loeb, and two of the hedge fund’s other nominees will join the Yahoo board. Five directors who had planned to leave later this year will now leave immediately. The interim CEO, Mr. Levinsohn, is someone that Mr. Loeb had suggested for the job.
Yahoo dumped its previous CEO, Carol Bartz, in September, disappointed that she hadn’t been able to increase revenue.
When Mr. Thompson came on board, he made big changes immediately. Co-founder Jerry Yang left the board in January. Mr. Thompson announced a reorganization and plans to lay off 2,000 workers, or about 14 percent of the workforce
But Third Point, which had pushed for Mr. Yang to leave and applauded Ms. Bartz’s dismissal, still wasn’t happy. On May 3, it issued a press release with what turned out to be an explosive accusation: Mr. Thompson had embellished his resume.
Privately, Mr. Thompson told his colleagues that he wasn’t responsible for the incorrect information. He blamed a Chicago headhunting firm, Heidrick & Struggles.
In an internal memo last week, Heidrick & Struggles denied Mr. Thompson’s accusation. “This allegation is verifiably not true, and we have notified Yahoo to that effect,” CEO Kevin Kelly wrote to employees.
On Sunday, a spokesman for the firm declined to comment.
Carlos Kirjner, a senior analyst at Sanford C. Bernstein, declined to comment on whether Yahoo’s board would be wise to oust Mr. Thompson. But he did suggest that Mr. Thompson’s previous job, as president of the fast-growing PayPal, hadn’t prepared him for Yahoo.
“It is very different to be CEO of a growth company, making choices between opportunities, and to be CEO of a company in turnaround mode, whose parts are declining or losing share,” Mr. Kirjner said
Mr. 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 Mr. 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.”
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