SAN FRANCISCO (AP) - A Yahoo director who didn’t challenge an inaccuracy in CEO Scott Thompson’s academic record will step down from the troubled Internet company’s board, according to a report published Tuesday.
Patti Hart, the head of the Yahoo search committee that hired Thompson in January, reportedly won’t seek re-election at the company’s annual meeting later this year. That’s what unnamed people close to the situation told All Things D, a technology blog affiliated with The Wall Street Journal.
Yahoo Inc., which is based in Sunnyvale, Calif., had no immediate comment.
Hart’s resignation would make her the first casualty of a dust-up caused by the recent exposure of a bogus college degree that has periodically appeared in Thompson’s official biography.
The bio included a computer science degree that Thompson never received from Stonehill College, a Catholic school near Boston. Thompson was graduated from Stonehill in 1979 with a bachelor’s in accounting, an accomplishment correctly listed in his bio.
The fabricated degree periodically appeared in various summaries about Thompson before Yahoo lured him away from his previous job running eBay Inc.’s online payment service, PayPal. Those earlier falsehoods have raised questions about whether Thompson deliberately allowed the deception to perpetuate and why Hart didn’t insist on a more thorough background check before Yahoo hired him.
After Thompson joined Yahoo, the bogus degree appeared on his bio on Yahoo’s website and in documents filed April 27 with the Securities and Exchange Commission.
An activist hedge fund that owns a 5.8 percent stake in Yahoo already had been demanding that the company jettison Thompson and Hart. The report about Hart’s impending departure comes the day after the hedge fund, Third Point LLC, filed a request to review all the internal Yahoo records that led to Thompson’s hiring.
In a Monday memo to Yahoo’s employees, Thompson apologized for the distractions caused by furor over his inaccurate bio without offering an explanation on who was responsible for the deception. He also promised to cooperate with an investigation by Yahoo’s board into the circumstances surrounding the illusory degree.
After announcing its plans for the inquiry last week, Yahoo provided more details on Tuesday about who will oversee the investigation. The probe will be handled by a committee of three directors who joined the company’s board after Thompson was hired.
Alfred Amoroso, a veteran high-tech executive, will lead the committee, which also will consist of John Hayes, American Express Co.’s chief marketing officer, and Thomas McInerney, former chief financial officer for IAC/InterActiveCorp. Los Angeles lawyer Terry Bird will serve as the special committee’s independent counsel.
Hart, 56, joined Yahoo’s board nearly two years ago. She is also CEO of gambling machine maker International Game Technology. Before joining Yahoo’s board, Hart was a director for Korn/Ferry International, which specializes in executive search.
Besides skewering Hart for shoddy research into Thompson’s background, Third Point blasted her for an inaccuracy about her academic history.
Hart’s bio had claimed she held a bachelor’s degree in marketing and economics. After being confronted by Third Point, Yahoo clarified that Hart graduated from Illinois State University with a bachelor’s degree in business administration with specialties in marketing and economics.
If she steps down, Hart will be the sixth director to leave Yahoo’s board since Thompson’s hiring. Yahoo co-founder Jerry Yang resigned in January and four other directors, including Chairman Roy Bostock, plan to step down at the company’s annual meeting.
Yahoo has delayed scheduling the meeting while it tries to fend off an attempt by Third Point to shake up the company’s board even more. Third Point’s leader, Daniel Loeb, is leading a campaign to elect him to the board, along with three of his allies. Loeb contends Yahoo needs more help than Thompson and the current board are currently providing as the company tries to snap out of long-running financial funk.
Yahoo shares rose 2 cents to $15.37 in afternoon trading. They have traded in a 52-week range of $11.09 to $18.84.
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