May 8, 2012
Yahoo CEO Apologizes, But Will Not Step Down
Michael Harper for RedOrbit.com
It would appear as if Third Point´s 3 letters and subsequent follow-up have strong-armed Yahoo CEO Scott Thompson into apologizing for “padding” his resume with false information, but he isn´t planning on stepping down.
According to an early morning release from Reuters, Yahoo´s board met yesterday afternoon to discuss the company's mounting troubles and controversy surrounding Thompson, who has reportedly made false claims on his resume, in which he listed a Bachelors degree in Computer Science from a college where such a degree didn´t exist while he attended.
Thompson´s refusal to step down is in direct opposition with the list of demands made by Dan Loeb and Third Point LLC, Yahoo´s largest investors.
In an email to employees, Thompson apologized for the recent scrutiny of the company, saying, "We have all been working very hard to move the company forward, and this has had the opposite effect. For that, I take full responsibility, and I want to apologize to you.”
“I am hopeful that this matter will be concluded promptly,” he wrote. “But, in the meantime, we have a lot of work to do.”
A copy of the memo was obtained by The Associated Press (AP).
Thompson´s memo came hours after Loeb´s “High-Noon” deadline had passed. As last week came to a close, Loeb had issued an ultimatum in which he asked for Scott Thompson to be fired, as well as the company to “publicly vet” the process by which Thompson has hired by noon on Monday, or else Loeb and Third Point would begin to take legal action.
One hour after the deadline had passed, Third Point had already begun the legal process to begin investigation´s themselves, ultimately looking for Thompson´s termination.
Third Point has also suggested four replacement candidates for the jobs they plan to terminate.
Thompson now awaits a response from the board, which spent yesterday working out the particulars of an internal review of Thompson´s claims as well as the process by which he was hired, according to Reuters.
“We believe that this internal investigation by this board must not be conducted behind a veil of secrecy and shareholders deserve total transparency,” Loeb said in his letter yesterday to Yahoo.
Loeb also cited Delaware law, which allows shareholders to inspect the company books if they have purpose and have met procedural requirements.
Loeb has been called an “activist investor” and has already been credited with changes to the Yahoo board; notably the resignations of co-founder Jerry Yang and chairman Roy Bostock.
These accusations have come at a very volatile time for Yahoo, as the company has yet to “right the ship,” as it were, laying off thousands of its employees.
While Loeb has taken charge to affect change in Yahoo, not every investor stands behind him. According to Reuters, director of research at Martin Capital Management Adam Seessel also owns Yahoo shares and appreciates Loeb´s enthusiasm, but doesn´t understand his timing.
“If it were normal times, this would warrant a dismissal,” said Seessel, speaking of Thompson´s falsified records.
“But he´s so new and the company is in such a sensitive spot.”
“Sometimes in the heat of the battle, you can´t get rid of your commander “¦ and a battle is going on.”