Dan Loeb has a significant importance for Yahoo. This is because his shareholder firm, ThirdPoint holds 5.8 percent of Yahoo’s shares. Loeb has been actively lobbying to get Yahoo the ‘right CEO.’ But the current CEO, Scott Thompson doesn’t really fit to his taste. He has been actively lobbying against Thompson and now, a discrepancy in Thompson’s resume seems to have further exacerbated the whole thing.
When Thompson was hired, it was being told that Yahoo’s current CEO had a degree in computer science. This, however, has turned out to he untrue now. He only has a degree in accounting and years of experience working at PayPal. Naturally, that doesn’t seem to suffice for Loeb.
After the disclosure of this discrepancy, Loeb’s firm, ThirdPoint has sent out a letter to Yahoo demanding the Thompson be removed from the position of being Yahoo’s CEO by Monday. According to the firm, ‘Mr. Thompson and the Board should make no mistake: this is a big deal. CEO’s have been terminated for less at other companies.’
The letter goes on to say that shall Yahoo fail to take any actions as per the demands, ThirdPoint shall ‘consider it grounds for further action.’ This action is also somewhat hinted in the letter’s details as quoted below:
- Publicly reveal the process by which it vetted Mr. Thompson as a potential CEO candidate. This disclosure should include the release of all minutes of any meeting at which Mr. Thompson’s candidacy was discussed and any reports or other materials upon which directors relied to evaluate Mr. Thompson’s candidacy.
- Disclose whether any Board member, including Maynard Webb, who has long-standing ties to Mr. Thompson, and Ms. Hart, who headed the Search Committee, was aware of Mr. Thompson’s deception prior to receipt of Third Point’s letter yesterday.
- Provide shareholders with all information regarding the director nomination process, including the so-called “skills matrix” referred to in the Company’s preliminary proxy statement, which the Board purportedly used to determine the qualifications of various candidates, including Third Point’s nominees.
- Terminate Mr. Thompson for cause immediately given his demonstrable unsuitability to remain Chief Executive Officer and a director of Yahoo! and accept the resignation of Ms. Hart for similar reasons.
- Finally, we urge the Board to stop wasting valuable company resources and drop its resistance to placing the Third Point nominees on the Board. We are prepared to join immediately. Once on the Board, our first tasks will be to work with the remaining Board members to find Yahoo! a new leader with the qualifications and integrity to lead the Company and install best practices of corporate governance. The Company can ill afford to continue this misguided fight with its largest outside shareholder while it has so many other fires to put out. There has been enough damage already.
Naturally, Yahoo has to respond to all this and not without shaking a leg. According to the statement released by the company, ‘In connection with the statement the company made earlier today about Scott Thompson, the Yahoo board will be reviewing this matter, and upon completion of its review, will make an appropriate disclosure to shareholders.’