Yahoo Inc. Chief Executive Scott Thompson apologized to employees as the fallout from a questionable resume spread to the company's board, with director Patti Hart announcing she would not seek reelection.
The Sunnyvale, Calif., company also said Tuesday that it had formed a special three-person committee to conduct a thorough review of Thompson's academic credentials "as well as the facts and circumstances related to the review and disclosure of those credentials" in connection with his CEO appointment.
It was revealed last week that Thompson, former PayPal head, may have exaggerated his education. An EBay bio and recent Yahoo filings with the Securities and Exchange Commission stated that Thompson had degrees in accounting and computer science from Stonehill College in Massachusetts. His having a computer science degree turned out to be false. Yahoo last week called it an "inadvertent error."
The discrepancy was initially flagged by activist shareholder Daniel Loeb of hedge fund Third Point. Loeb discovered that Stonehill, a private Catholic school near Boston, didn't begin offering computer science degrees until four years after Thompson had graduated. Loeb, who is waging a proxy battle for board seats, has aggressively pushed for Thompson to step down.
In an email sent to Yahoo employees Monday, Thompson, 54, said he was "hopeful that this matter will be concluded promptly."
"I want you to know how deeply I regret how this issue has affected the company and all of you," he said in the email, which was provided to The Times by Yahoo. "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 I want to apologize to you."
Meanwhile Hart, the Yahoo director who headed the search that led to Thompson's hiring in January, has decided against seeking reelection to the board at its next annual meeting. Hart is CEO of International Game Technology; she said in a statement that she wanted to "eliminate activities that may interfere with my ability to carry out my commitments to IGT."
IGT Chairman Philip Satre said the company's board had conducted a review of Hart's academic credentials and "found no material inconsistencies."
Yahoo's special committee is chaired by Alfred Amoroso, an independent director who joined the board in February. The other members are John Hayes and Thomas McInerney, independent directors who joined the board last month.
"The special committee and the entire board appreciate the urgency of the situation and the special committee will therefore conduct the review in an independent, thorough and expeditious manner," the company said in a statement. "The board intends to make the appropriate disclosures to shareholders promptly upon completion of the review."
It's just the latest headache for Yahoo, which has struggled for years to turn itself around.
Although the company still has one of the largest audiences online, it has steadily lost ground to rivals Google Inc. and Facebook Inc. in the battle for advertising dollars. A month ago, Yahoo announced that it would lay off 2,000 employees, or 14% of its workforce.
Yahoo shares edged up 1 cent on Tuesday to $15.36.