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May 08, 2012

Major Yahoo Shareholder Calls for CEO to Resign Following Fake Credential Scandal

By David Delony, Contributing Writer

Third Point, a major shareholder in Yahoo, has called for Yahoo CEO Scott Thompson to resign after inaccuracies about his academic background were uncovered.



Thompson claimed he had received bachelor's degrees in both accounting and computer science from Stonehill College in Massachusetts, but the college confirmed that Thompson only held an accounting degree.

In fact, Stonehill did not award computer science degrees until 1983, four years after Thompson graduated.

Daniel S. Loeb, CEO of Third Point LLC, wrote a scathing open letter to Yahoo last week, calling for the board to fire Thompson, given his claiming of a credential he didn't have.

“Shareholders must also question how the Board of Directors, specifically the Search Committee chaired by Ms. Patti Hart, could permit the Company to hire a CEO with this discrepancy in the public record,” Loeb wrote. “We assumed previously that the Committee would have conducted a thorough background check on Mr. Thompson – and even if not thorough, the most basic of such checks would address Mr. Thompson's education and degrees. Should our concerns about Mr. Thompson's record be accurate, that would call into serious question whether the Board failed to exercise appropriate diligence and oversight in one of its most fundamental tasks – identifying and hiring the Chief Executive Officer.”

Loeb has also been mounting a personal campaign to have himself appointed to the beleaguered Internet company's board of directors following their installation of Thompson.

“If misrepresentations were made, they would confirm yet again that Yahoo! is in dire need of a complete corporate governance overhaul,” Loeb wrote in his letter. “As we have asserted repeatedly and forcefully, as Yahoo!'s (News - Alert) largest outside shareholder and a voice for our fellow investors, we believe the Yahoo! Board requires fresh, outside perspectives from individuals who have no connection to a failed regime and have the expertise to address the serious challenges facing the Company. It is also critical that these individuals possess the highest levels of integrity and exhibit diligence and due care in all their dealings.”

Third Point said it wants to research how well Yahoo vetted their CEO, which they claim they have a righ to do under Delaware law, where Yahoo is incorporated.




Edited by Juliana Kenny
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