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Third Point Wants Yahoo CEO Temporarily Replaced

Wednesday, 09 May 2012 02:51 PM

Yahoo Inc.'s largest outside shareholder said the Internet company should make its finance chief or head of media the interim chief executive because of the controversy surrounding CEO Scott Thompson's educational background.

Third Point, which is waging a bitter proxy battle against Yahoo's board and which exposed inaccuracies in Thompson's official biography last week, repeated its demand on Wednesday that Yahoo fire Thompson and install four of its handpicked director candidates to the board.

Yahoo's board appointed a special committee to investigate Thompson's background on Tuesday and to review the "facts and circumstances" surrounding the hiring of Thompson.

Yahoo acknowledged last week that Thompson, the former president of eBay division PayPal, does not have a computer science degree despite what was stated on his official company biography and in regulatory filings with the U.S. Securities and Exchange Commission.

Ebay Inc. CEO John Donahoe came to Thompson's support on Wednesday, telling reporters at an event in Tokyo that he hoped Thompson would "get through this," and that he was "Scott's biggest fan," according to a report in Bloomberg News.

Donahoe said that eBay's regulatory filings when the company hired Thompson were accurate.

The controversy has engulfed Yahoo in turmoil, raising questions about the future of Yahoo's fourth CEO in five years and the latest plan to revive the company's flagging revenue growth.

Thompson sent an email to Yahoo's employees on Monday apologizing for the fallout from the controversy and noting that he hoped the board's review would be concluded promptly. But he has not publicly addressed the discrepancy in his educational background.

Third Point CEO Dan Loeb said in a letter to Yahoo's board on Wednesday that Thompson's apology was "insufficient," and he chided Yahoo's board for not taking any "decisive action" in the six days since the discrepancy in Thompson's educational background was revealed.

"It seems farcical to us that the Board will most likely spend more time deliberating over whether Mr. Thompson should be fired than it did properly vetting whether he should have been hired," Loeb wrote.

He recommended that Yahoo appoint Chief Financial Officer Tim Morse or Ross Levinsohn, Yahoo's head of global media, to the role of interim CEO, while one of Third Point's director candidates be tasked with heading a search committee to find a new permanent CEO.

Shares of Yahoo fell 6 cents to $15.30 shortly after midday on Wednesday.

© 2018 Thomson/Reuters. All rights reserved.

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Wednesday, 09 May 2012 02:51 PM
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