Friday, 1 July 2016
Last updated 21 min ago
May 8 2012 | 10:52am ET
Third Point did not get the scalp it demanded yesterday—that of Yahoo! CEO Scott Thompson—but it did get an apology. Unsurprisingly, the activist hedge fund doesn't think that's quite enough.
Third Point on Friday demanded that Thompson, who was hired in January, just weeks before Third Point celebrated the exit of Yahoo! founder Jerry Yang, be fired by yesterday. The call for Thompson's exit came after Third Point discovered inaccuracies in Thompson's résumé.
Thompson wasn't fired, but the company's board met to consider an internal review. Thompson also told Yahoo! employees that he was sorry for the trouble caused by the controversy.
"I want you to know how deeply I regret how this issue has affected the company and all of you," Thompson wrote in an internal memo. "We have all been working very hard to move the company forward and this has had the opposite effect. For that, I take full responsibility and want to apologize to you."
New York-based Third Point was not satisfied. In another letter to Yahoo!'s board, the hedge fund again called for Thompson's firing, and demanded to see records related to Thompson's hiring.
Third Point also demanded records related to the appointments of director Patti Hart and five new board members. Third Point has also demanded Hart's resignation in addition to Thompson's firing for an error in her résumé.
The hedge fund discovered last week that Thompson, the former CEO of PayPal, repeatedly claimed to have degrees in accounting and computer science from Stonehill College. In fact, he has only the former; what's more, Stonehill did not even have a computer science major when Thompson attended the school.
Yahoo! and Thompson have called the inaccuracies "inadvertent," an explanation Third Point poured scorn upon.
"To assert that years of inaccurate SEC filings, website biographies and, most likely, D&O questionnaires and curriculum vitae (including, presumably, the CV provided to Yahoo! when Mr. Thompson reached out for the job) were 'inadvertent' is, in our view, the height of arrogance," Third Point wrote.
Nor did Third Point accept Yahoo!'s explanation that while Hart's degree from Illinois State University was not in marketing and economics, as her biography claims, but business administration, it was with "specialities" in those fields.
"Yahoo!’s response 'confirming' that Ms. Hart 'specialized' in Marketing and Economics, rather than having earned her degree in such subjects (as Ms. Hart has asserted in filings for years) is a similar canard. A 'specialty; is not a major. It is not a 'minor.' We don’t know what it is, but we do know that like Mr. Thompson, Ms. Hart has been misrepresenting her actual degree to the investing public for years."
"The failure to detect the easily-discoverable inaccuracies in Mr. Thompson's résumé creates significant doubt as to the thoroughness of the entire board nomination process," Josh Targoff, Third Point's chief operating officer, wrote to the board yesterday.