The proxy fight between Yahoo and shareholder firm Third Point took a new turn with the revelation by Daniel Loeb, CEO of Third Point, that Yahoo CEO Scott Thompson does not have a computer science degree as claimed in documents filed with the SEC.
Fox Business reports that Loeb raised questions about Thompson's educational credentials in a letter he sent to Yahoo's board of directors on Thursday, urging the board to immediate action if it is found that Thompson embellished his credentials and violated Yahoo’s code of ethics.
Loeb, CEO of the hedge-fund firm Third Point, who is also a major shareholder in Yahoo, said he discovered that Thompson studied accounting at the Stonehill College near Boston and not computer science. Fox Business reports Loeb said rather than the double degrees of accounting and computer science that Thompson claims and which Yahoo reported in a recent filing with the Securities and Exchange Commission (SEC), Stonehill confirmed that Thompson graduated with a degree in accounting only.
Leob said he found that Stonehill did not start awarding computer science degrees until 1983, four years after Thompson graduated.
Yahoo Inc., according to Daily Mail, has confirmed Loeb's findings but says the misinformation was an "inadvertent error." Fox Business reports a Yahoo spokesman confirmed that Thompson received a Bachelor of Science degree in business administration with a major in accounting.
But Loeb is not impressed with the "inadvertent error" excuse. He said in a letter he wrote to the board that the overstatement undermines Thompson's credibility and “reflects poorly” on his character. The letter said: "If misrepresentations were made, they would confirm yet again that Yahoo! is in dire need of a complete corporate governance overhaul." He added: "If Mr Thompson embellished his academic credentials we think that it undermines his credibility as a technology expert and reflects poorly on the character of the CEO who has been tasked with leading Yahoo! at this critical juncture."
Daily Mail reports that Loeb controls 5.8 percent in Yahoo. He is leading a campaign for a shake up of the company's board as part of efforts to revive the company's flagging fortunes.
Loeb claimed he made the discovery by simply Googling Thompson. Fox Business reports Loeb said a "rudimentary Google search" brings up a Stonehill alumni announcement about Thompson. Loeb said he then contacted the college for confirmation and he was informed that "Mr. Thompson did indeed graduate with a degree in accounting only."
But Yahoo is standing by its CEO who was previously the president of Paypal. According to Yahoo, Thompson is "a highly qualified executive with a successful track record leading large consumer technology companies."
CNN, however, points out what appears to show that the misinformation was not "inadvertent error." Thompson's official biography at his last job with PayPal also makes the claim that he has a degree in computer science. According to CNN, the "inadvertent error" is one that Thompson has made repeatedly over his long career in the tech industry.
Loeb, in his letter to Yahoo board, suggested tongue-in-cheek how Thompson might have earned a computer science degree: "We learned that during Mr. Thompson's tenure at Stonehill only one such course was even offered: Intro to Computer Science. Presumably, Mr. Thompson took that course."
CNN reports Loeb has a long history of launching proxy fights and Yahoo is the latest firm he is targeting. Loeb runs ValueYahoo.com, a website that he uses to attack Yahoo’s management and raise issues on the company's financial performance. Third Point, in February, filed paperwork proposing four new board members for Yahoo, including Loeb. In March, Yahoo appointed three new directors, excluding Loeb and all his nominees. In an effort to avoid a proxy war, Yahoo offered to appoint Harry Wilson, one of Loeb's nominees, but Loeb rejected the offer and insisted that he wanted to be appointed.
Fox Business reports that Thompson replaced Yahoo CEO Carol Bartz last year. Before then he was president of eBay’s PayPal business, a position he was appointed to after serving as PayPal’s senior vice president and chief technology officer.
Fox Business reports that before PayPal, Thompson had been vice president of technology solutions at Visa’s Inovant subsidiary, where he was in charge of the firm's global payment system. He also worked as chief information officer of Barclay's Global Investors.