Belfast Telegraph

Friday 29 August 2014

Yahoo shareholder demands records

A major Yahoo shareholder has made a legal demand for internal records about the embattled internet company's hiring of chief executive Scott Thompson.

Activist hedge fund Third Point took the unusual step as part of its effort to oust Mr Thompson for an inaccuracy about his academic credentials.

Even before he joined Yahoo four months ago, Mr Thompson's biography 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 US Securities and Exchange Commission.

After exposing the fabrication last week, Third Point set a noon US time deadline on Monday for Yahoo to sack Mr Thompson for unethical conduct. That deadline passed without any change in his status.

Several experts in corporate ethics and board governance have said the deception regarding Mr Thompson's education probably merits ending his short reign as CEO.

The push to get him sacked 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 documents that may explain how much research the company's board did about Mr Thompson before employing him in January. The fund says it is entitled to the records under the laws of Delaware, where Yahoo is incorporated.

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 Mr Thompson's biography. Yahoo has promised to share its findings with shareholders when the board completes its inquiry.

Third Point, which has invested about a billion dollars to acquire a 5.8% stake in Yahoo, wants to do its own digging into what happened. Besides demanding the internal records leading to Mr Thompson's hiring, Third Point is seeking documents on the selection of six directors.

In a memo sent to the troubled internet company's employees, Mr Thompson said he was sorry for allowing an inaccuracy about his education to appear in his official biography, but not remorseful enough to heed calls for his resignation. The memo did not offer any explanation why Mr Thompson's biography has periodically listed the bachelor's degree in computer science that he never received.

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