Third Point LLC’ Dan Loeb is now attacking Yahoo! Inc. (NASDAQ: YHOO) over what is a highly unusual incidence: discrepancies of the company’s educational background of CEO Scott Thompson and over a member of the board named Patti Hart. Third Point is an activist fund with 4 nominees and it owns roughly 5.8% of Yahoo! shares. Today’s news release is effectively a letter to the Yahoo! Board of Directors:
Dear Board of Directors:
According to the Yahoo! Form 10-K/A, filed with the Securities and Exchange Commission on April 27, 2012, newly-hired Chief Executive Officer, Scott Thompson, “holds a Bachelor’s degree in accounting and computer science” from Stonehill College. This assertion was repeated in the Company’s draft proxy statement, also filed with the SEC on April 27, 2012, as well as on the Company’s website (http://pressroom.yahoo.net/pr/ycorp/scott-thompson.aspx).
A rudimentary Google search reveals a Stonehill College alumni announcement stating that Mr. Thompson’s degree is in accounting only. That announcement is consistent with other documents (including filings with the SEC) that reflect Mr. Thompson received a degree in accounting, but not computer science.
Upon recognizing this discrepancy, Third Point initially assumed that the documents we had reviewed were incorrect and the representations in Yahoo!’s public filings were accurate. However, we were then informed by Stonehill College that Mr. Thompson did indeed graduate with a degree in accounting only. Furthermore, Stonehill College informed us that it did not begin awarding computer science degrees until 1983 — four years after Mr. Thompson graduated. We inquired whether Mr. Thompson had taken a large number of computer science courses, perhaps allowing him to justify to himself that he had “earned” such a degree. Instead, 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.
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.
What the real situation is here is one which we have not looked into. This comes up from time to time where CEOs and other corporate officers are either accused of fudging on their educational background or their credentials. Some turn out to be true, some turn out to be errors or in context.
If today’s news turns out to be true, this will also reflect poorly on the credibility of eBay Inc. (NASDAQ: EBAY) as Scott Thompson was the former head of eBay’s PayPal unit.
Yahoo! shares are down 2.1% at $15.34 on the day but not on strong trading volume.
JON C. OGG
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