Yahoo launches CEO credentials probe
2012-05-09 10:35
San Francisco - Yahoo! said on Tuesday it would create a special committee with the help of an outside lawyer to review the controversy over chief executive Scott Thompson's misstated academic credentials.
Amid stepped up pressure from an activist hedge fund, the Yahoo! board announced that the committee would review Thompson's academic background as well as how much was known by those who hired him.
Yahoo! last week acknowledged an "inadvertent error" in the CEO's online bio, which wrongly indicated that he had a degree in computer science.
The news of the special committee came a day after a hedge fund battling the management of Yahoo! called for the release of documents about the recruitment of Thompson in a scathing filing with regulators.
The filing by Third Point with Securities and Exchange Commission came after the hedge fund's deadline passed on its demand for the ouster of Thompson for misrepresenting his educational background.
Special committee
Third Point, which owns 5.8% of the struggling tech giant, filed its slate of candidates for the Yahoo! board, ensuring a proxy battle, as it stepped up its attack on management.
The special committee is chaired by Alfred Amoroso, an independent director of Yahoo!, and has retained as its independent counsel Terry Bird, a Los Angeles attorney specialising in litigation and internal investigations.
"The special committee and the entire board appreciate the urgency of the situation and the special committee will therefore conduct the review in an independent, thorough and expeditious manner," Yahoo! said in a release.
"The board intends to make the appropriate disclosures to shareholders promptly upon completion of the review."
Yahoo! also announced that independent board member Patti Hart has decided not to seek re-election at the annual shareholders' meeting, the date for which had yet to be set.
"We thank Patti for her years of service and wish her all the best," the Yahoo! board said in a released statement about Hart, who is chief executive of computer game equipment company International Game Technology.
Hart had also become a target for Third Point, which said she had exaggerated her academic achievements.
On Monday, Third Point escalated its attack on the firm, saying it "has not explained how its Search Committee could hire a CEO without doing a rudimentary check on the applicant's credentials - a check that would have quickly revealed that Mr Thompson did not have a computer science degree".
Third Point, led by activist investor Daniel Loeb, said that "Yahoo!'s failure of process is especially damning" and will force "a wasteful proxy contest at the 2012 annual meeting".
Third Point, which failed to win an accord for a slate of Yahoo! board members, said inaccuracies on the bios of Thompson and Hart should be cause for their removal.
- SAPA
