The résumé imbroglio at Yahoo (NASDAQ:YHOO) led to chief executive Scott Thompson stepping down Sunday, as the company concluded that he had lost his credibility and the ability to lead.
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The turmoil at Yahoo is typified by the fact that three chief executives have departed the company’s services in five years. Activist hedge fund Third Point LLC has long been demanding changes in the Internet major’s board to revamp its management.
The goof-up on Thompson’s credentials gave Third Point Chief Executive Daniel S. Loeb another handle in his struggles to reform Yahoo. The qualifications of another director, Patti S. Heart, also came under a cloud following Third Point’s investigations — she is not seeking re-election to the board.
The situation probably left Yahoo’s board with little room to maneuver and it also announced Sunday a deal that gave Loeb and two of his designates seats on Yahoo’s board. In the purge, five current directors are leaving immediately, while the board is considering adding another person. Fred Amoroso, who was heading the internal inquiry into the credentials flub, has assumed chairmanship of the company. Ross Levinsohn, global head of media, will take over Thompson’s position.
“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 and further accelerate the substantial advances the company has made operationally and organizationally since last August,” Mr. Amoroso said in a statement.
Mr. Loeb said that he and his chosen nominees were “delighted to join the Yahoo board and work collaboratively with our fellow directors.”
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