Did Yahoo Deceive Investors?
Yahoo’s (NASDAQ:YHOO) “inadvertent error” in a regulatory filing regarding CEO Scott Thompson’s educational qualifications has drawn the ire of activist hedge fund manager Daniel Loeb, giving him more grounds to attack Yahoo’s governance and, specifically, Thompson himself.
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Apparently, Thompson does not really hold a bachelor’s degree in computer science from an Easton, Massachusetts college, as was stated by Yahoo in the filing last week. Yahoo confirmed that it had exaggerated Thompson’s qualifications, but dismissed it as a simple error rather than intentional deceit.
To Daniel Loeb, this was grist to the mill in the context of his ongoing struggle against Yahoo’s board. He alleged that the mistake was typical of Yahoo’s poor corporate governance, and demanded an investigation into whether Thompson had misled the Board by embellishing his academic credentials.
In a letter to Yahoo’s board, Loeb wrote, “If Mr. Thompson embellished his academic credentials we think that it 1) undermines his credibility as a technology expert and 2) reflects poorly on the character of the CEO who has been tasked with leading Yahoo at this critical juncture. Now more than ever Yahoo investors need a trustworthy CEO.”
However, Yahoo is standing behind Thompson: “This in no way alters that fact that Mr. Thompson is a highly qualified executive with a successful track record leading large consumer technology companies. Under Mr. Thompson’s leadership, Yahoo is moving forward to grow the company and drive shareholder value.”
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