Yahoo! CEO! quits! after! CV! row!
Third Point LLC claims Scott Thompson’s scalp, wins board seats
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Scott Thompson has stepped down as Yahoo! CEO and has been replaced, for the time being at least, by Ross Levinsohn. Several directors, namely Patti Hart, VJ Joshi, Arthur Kern and Gary Wilson, have also left the company.
The departures are a big win for Third Point LLC, an investment company that says it is Yahoo!'s largest outside shareholder; it recently issued a public letter in which it called into question the veracity of a Computer Science degree on Thompson’s CV.
The letter also accused search committee chair Patti Hart of making a similar error in her CV.
Third Point’s letter stated “we believe the Yahoo! Board requires fresh, outside perspectives from individuals who have no connection to a failed regime and have the expertise to address the serious challenges facing the Company. It is also critical that these individuals possess the highest levels of integrity and exhibit diligence and due care in all their dealings”.
Third Point seems to have achieved its goal, with its CEO Daniel Loeb and two nominees - Harry J. Wilson, and Michael J. Wolf - to join the Yahoo! board.
Loeb said, in Yahoo!’s press release about the changes, that he is “delighted to join the Yahoo! board and work collaboratively with our fellow directors to foster a culture of leadership dedicated to innovation, excellence in corporate governance, and responsiveness to users, advertisers and partners. We are confident this Board will benefit from shareholder representation, and we are committed to working with new leadership to unlock Yahoo!'s significant potential and value".
One survivor is Roy Bostock, “who has stepped down from his role as non-executive chairman in order to accelerate the leadership transition for the new board”. ®
COMMENTS
Go TPllc
If more investers (individuals or groups) took the effort to hold directors of the companies they are invested in to account for everything they claim and do, the corporate world might just not be quite as broken as it is!
Re: Money vs. quality
As I understand it, the problem is that he lied on SEC filings - his report to the market about the company. That's kinda illegal.
SEC filings include other information like profit and loss figures. If you can't trust what is written there, stock markets can't work. It's kind of important for capitalism that we are serius about enforcing accuracy.
The later part of your question is more whether we should want it to.
Activist shareholders have a bit of a record as asset strippers. You buy a stake in a company, and maybe borrow the money to buy it. You need a return quick. Fastest way to do that is to seperate out the profitable parts of the company, detatching them from scary things like pension commitements, and sell them off. The parts becoming worth more than the whole. Profit.
Is this a bad thing?
Yahoo has some great assets. Which would have a brighter future as part of a different company. Yahoo Japan would be an excelent purchase for a Japanese TV network or mobile carrier.
As part of a company that is unable to invest, or just really bad at internal investment, that unit has a sorry future. It will support the worse parts of the company and not make the great products it could with another owner.
Asset stripping is pretty horrible when it happens to your company, but can be a good thing in the long run, if you are in a good unit. Bad ones are parasites, kept alive artificially by being in a big company, better that they should die.
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