NEW YORK-Yahoo announced yesterday that it was appointing Ross Levinsohn as interim CEO and Fred Amoroso as chairman of its board, effective immediately. Yahoo said CEO Scott Thompson has left the company. Thompson has been under fire for more than a week over mentions in his resume and company filings of a computer science degree he did not earn.
Amoroso was the board member leading the investigation into inaccuracies on Thompson's resume. Levinsohn is Yahoo's head of global media. Third Point, the hedge fund that owns a six per cent stake in Yahoo, has pushed for the changes. Third Point CEO Dan Loeb and two of his nominees will join Yahoo's board. Four directors who had planned to retire at the annual meeting will step down immediately.
At various times, published summaries of Thompson's academic background have included a computer science degree from Stonehill College. Thompson earned an accounting degree from Stonehill, a Catholic school near Boston, in 1979. He did not earn a computer science degree. Yahoo correctly lists that information in his biography.
Yahoo hired Thompson, the former head of eBay's PayPal, in January to help orchestrate a turnaround. Though Yahoo is one of the Internet's most-visited websites, the company has struggled to grow in face of competition from the likes of Google and Facebook. The company's difficulties have irked investors. Thompson took the helm as Yahoo's fourth chief executive in less than five years.
Carlos Kirjner, a senior analyst at Sanford C Bernstein, declined to comment on whether Yahoo's board was wise to oust Thompson. But he did suggest that Thompson's previous job, as president of the fast-growing PayPal, hadn't prepared him for Yahoo.
"It is very different to be CEO of a growth company, making choices between opportunities, and to be CEO of a company in turnaround mode, whose parts are declining or losing share," Kirjner said. The Associated Press previously reported that Thompson told his colleagues that he didn't supply the incorrect information.
The Journal said yesterday that the Chicago headhunting firm, Heidrick & Struggles, which Thompson blamed for the bogus information, has denied the claim in an internal memo. Officials from Heidrick & Struggles didn't immediately return calls for comment.
The flap over Thompson's inaccurate bio earlier claimed its first casualty-Patti Hart, the Yahoo director who oversaw the search that culminated in his hiring. Hart is to step down at Yahoo's still-unscheduled annual meeting later this year. Thompson's resume' discrepancy might have been more forgivable at a company that was making money for shareholders, said James Post, a management professor at Boston University.
"Yahoo has been embattled for such a long time that there are a lot of people prepared to believe the worst about that company," said Post, who specializes in corporate governance and professional ethics. "When you're angry at the management and the board, when nothing's going right and you're losing money, it's understandable that shareholders would adopt an 'off with their head' attitude."