Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
A major Yahoo shareholder has made a legal demand for internal records about the embattled Internet company's hiring of CEO Scott Thompson.
Activist hedge fund Third Point LLC took that unusual step Monday as part of its effort to oust Thompson for an inaccuracy about his academic credentials.
Even before he joined Yahoo four months ago, Thompson's bio has periodically listed a bachelor's degree in computer science that he never received. The exaggeration was most recently repeated in an April 27 filing with the Securities and Exchange Commission.
After exposing the fabrication last week, Third Point set a noon Eastern Time deadline Monday for Yahoo to fire Thompson for unethical conduct. That deadline passed without any change in Thompson's status.
Several experts in corporate ethics and board governance have said the deception regarding Thompson's education probably merits ending his short reign as CEO.
The push to get him fired is unfolding against the backdrop of Third Point's campaign to gain four seats on Yahoo's board. Daniel Loeb, who runs Third Point, believes he and three allies could help boost Yahoo's revenue and long-sagging stock price if they were appointed to the board.
Third Point wants to review Yahoo Inc. documents that may explain how much research the company's board did about Thompson before hiring him in January. The fund contends it's entitled to the records under the laws of Delaware, where Yahoo is incorporated.
Yahoo, which is based in Sunnyvale, Calif., didn't respond to requests for comment.
After initially brushing off the misinformation as an "inadvertent error," Yahoo's board decided to open an investigation into the circumstances that led to the computer science degree being including on Thompson's bio. Yahoo has promised to share its findings with shareholders when the board completes its inquiry.
Third Point, which has invested about $1 billion to acquire a 5.8 percent stake in Yahoo, wants to do its own digging into what happened. Besides demanding the internal records leading to Thompson's hiring, Third Point is seeking documents on the selection of six directors.
Five of them have been appointed since Yahoo hired Thompson. They are: Peter Liguori, John Hayes, Thomas McInerney, Maynard Webb Jr. and Fred Amoroso.
Third Point also wants records concerning the appointment of Patti Hart to the board in 2010. Hart led the committee in charge of the search for new directors after co-founder Jerry Yang resigned from Yahoo's board in January and four other members announced they would step down later this year.
Third Point also wants Hart to resign from the board because of an inaccuracy that the hedge fund uncovered on her bio. Hart's bio had claimed she held a bachelor's degree in marketing and economics. After being confronted by Third Point, Yahoo clarified that Hart graduated from Illinois State University with a bachelor's degree in business administration with specialties in marketing and economics.