Yahoo! CEO Scott Thompson resigns amid resume scandal

 

Citing "personal reasons," Yahoo!'s Scott Thompson has resigned his brief tenure as CEO of the struggling search giant.

Update 5/14: Scott Thompson has revealed to colleagues that he his decision was partly based on recently learning that he has thyroid cancer.
Scott Thompson can now add “former Yahoo! CEO” to his highly contentious resume. As of Sunday, the 54-year-old former PayPal head is out at the Sunnyvale search giant, “for personal reasons,” according to Kara Swisher at All Things D. The move brings to a close a tumultuous chapter of corporate governance for Yahoo!, and ends Thompson’s brief four-month tenure with the company, a period marred by a high-profile proxy battle with shareholders and controversial layoffs.
Hedge fund billionaire Daniel S. Loeb, who’s role in Thompson’s ouster was pivotal, has also been awarded a seat on Yahoo!’s board of directors, along with two of his colleagues. Loeb’s Third Point, LLC hedge fund originally revealed the discrepancy in Thompson’s corporate biography and resume that undoubtedly lead to his resignation today, and has had a long-standing antagonism with Yahoo! leadership. As part of the settlement, Third Point has agreed to drop its proxy battle — a tool that allows shareholders to exercise their ownership rights by attempting to install executives and board members of their own choosing.
Thompson will be replaced in the interim by executive vice president Ross Levinsohn, “effective immediately,” according to a statement released Sunday. Yahoo!’s Chairman of the Board, Roy Bostock, has also stepped down, presumably for his role in the selection of Thompson as CEO. Fred Amoroso has replaced him on the Board as Chairman.
“The Board is pleased to announce these changes and the settlement with Third Point, and is confident that they will serve the best interests of our shareholders and further accelerate the substantial advances the Company has made operationally and organizationally since last August,” said Amoroso. “The Board believes in the strength of the Company’s business and assets, and in the opportunities before us, and I am honored to work closely with my fellow directors and Ross to continue to drive Yahoo! forward.”
Almost from the day that Thompson took the helm at Yahoo!, Loeb’s Third Point had been jockeying to have him removed, and to have its own members instated to the Board of Directors (including Loeb himself). Thompson had been reticent in agreeing to the changes, and the relationship between the executive and Third Point — Yahoo!’s single largest shareholder — had become toxic in recent weeks.
“Am I conflicted to advocate for the interests of other shareholders because we are owners of 5.8% (over $1 billion) of Yahoo! shares (unlike the non-retiring and proposed board members who have never purchased a single share of Yahoo!…),” said Loeb in an open letter released last month.
But today, Loeb and his colleagues are singing a different tune, having prevailed in not only forcing out the embattled CEO, but also extracting almost every one of their demands from the current Board.
“Harry, Michael and I are 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,” said Loeb as part of the statement. “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.”
A contentious issue that lead to the rift between Thompson and Yahoo!’s shareholders was the former-CEO’s attempted sale of Yahoo!’s stake in China’s Alibaba Group. Loeb and his investors felt that Yahoo! was cashing out of a lucrative investment opportunity too early, and should instead double-down and invest more in the Chinese online marketplace leader.
Thompson’s resignation comes after the company’s previous CEO Carol Bartz was fired after only a year on the job, reportedly owing to her failure in keeping up with the likes of competitors such as Facebook and Google. Yahoo!’s stock price has declined over 50 percent in the past five years.

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