Yahoo Stands by Their CEO's Faulty Résumé

Yahoo is now in a fight with one of his largest shareholders over the faulty résumé of its chief executive and board member. "Yahoo CEO Scott Thompson's resume  'error' could get him booted" by Martha C. White of MSNBC.com reports that Hedge fund Third Point LLC, the largest shareholder, found that CEO Scott Thompson lied about holding two bachelor degrees- he has one. Yahoo’s response to the finding was to release this statement: “This in no way alters the fact that Mr. Thompson is a highly qualified executive with a successful track record leading large consumer technology companies”.

Third Point’s response to the statement was a “letter to Yahoo on Friday calling for the ouster of Thompson along with board member and search committee chair Patti Hart". The letter, written by CEO of Third Point Daniel S. Loeb to the Board, made is clear that the shareholder felt that Thompson and Hart lacked integrity and that Yahoo’s response was unacceptable. A few quotes from the letter:

“Yahoo!s initial response yesterday to Third Point’s identification of material inaccuracies in both CEO Scott Thompson’s and Director Patti Hart’s education record was insulting to shareholders”

“…Yahoo!s response ‘confirming’ that Ms. Hart ‘specialized’ in Marketing and Economics, rather than her degree in such subjects (as Ms. Hart has asserted in filings for years) is a similar canard. A ‘specialty’ is not a major. It is not a ‘minor’”

“Irreparable damage to Yahoo!s culture will continue every day that the Board allows Mr. Thompson and Ms. Hart to remain at the helm of the Company after having clearly demonstrated that they lack even the ‘minimum qualification for service as a director of the Company’”

“Mr. Thompson, in particular, cannot possibly have any credibility remaining with the all-important Yahoo! Engineers, many of which earned real – not invented – degrees in computer science”

While most of the coverage of this news has been about the CEO, Third Point has an issue with both Hart and Thompson staying after lying about their education. White’s article illustrates that other executives have been caught lying on their résumé – some leave, some stay. However, the letter from Third Point stresses that the lies were not just in résumés but also in the repeated media advertising of such “education”.

Yahoo can continue to support their CEO and board member but it’s at the expense of pissing off one of their largest shareholders. The worse the fight between Yahoo and Third Point gets the more it fuels bad publicity. This comes months after firing their previous CEO over the phone. Considering Thompson is new, Yahoo may feel the need to keep him to show they made no mistake in choosing him. If they fire him, it proves that the current board misses crucial information when picking a CEO and that Third Point is right. That could fuel Third Point to make more demands from Yahoo.