Monday, May 14, 2012

Yahoo CEO resigns

The Chief Executive of Yahoo Scott Thompson has quit his job after he was accused of having a fake accounting and computer science degree, which was also included in his CV and Yahoo’s financial reports. He is being replaced by Ross Levinsohn who is currently Yahoo’s global media head. Levinsohn will take the CEO’s responsibility on a temporary basis until the board of directors decides on the new CEO.

This is another bad news coming from the company headquarters in Sunnyvale after it announced, a month ago, that it was going to lay-off 2000 employees. Yahoo has been facing severe competition from Google and Facebook and has witness dwindling profits in the extremely competitive environment. After joining Yahoo, Thompson had adopted a severe cost cutting strategy that included the lay-offs and several management changes. He was able to increase the company’s revenues after a gap of nearly three years.  

Prior to joining Yahoo, Thompson was the President of online payments at PayPal. He joined Yahoo in January and was the third CEO in approximately three years. He replaced Carol Bartz who was fired in September, 2011.

He had earlier claimed that he did not possess the accounting and computer science degree but it was his head hunting firm, Heidrick and Struggles’s fault that had included the information in his CV when he joined PayPal in 2000. Heidrick and Struggles had denied the allegation stating that the degree in question was a part of the CV that Thompson had submitted to the firm.

Daniel Loeb, a hedge fund manager and Yahoo’s shareholder, discovered the chief’s fake degree and launched a campaign for his removal. Loeb, who heads the Third Point investment fund which owns 5.8% of the company’s shares, also notified the Securities and Exchange Commission of Thompson’s embellishment.

Yahoo has already officially stated that its CEO did not have a computer science degree.

Following the news, Yahoo is set to change its executives and some new faces are going to join the board of directors. Leob had suggested four new names, including himself, out of which Leob, Michael J Wolf and Harry Wilson will join the board. Five existing board members, who were due to leave in the current year’s annual general meeting will also resign by Wednesday (16th May).

In its recent statement to the press, the company announced, The board is pleased to announce these changes and the settlement with Third Point, and is confident that they will serve the best interests of our shareholders ……

Your comments and feedback are always appreciated.
Sarfaraz A.K.
Half-Bridge (Return to main page)Share on blogge