How Did a Phantom CS Degree Get on CEO’s Bio in SEC Filings? Yahoo’s Not Saying.
Back in early 2008 when Scott Thompson got the job as president of eBay’s PayPal, the regulatory filing accurately listed his educational pedigree:
“Mr. Thompson holds a B.S. degree in Accounting from Stonehill College.”
The eBay filings over the next several years — until he left the online commerce giant for a much bigger job as CEO of Yahoo in January of this year — remained consistent.
But, curiously, Thompson’s bio on eBay’s Web site added an additional degree to his curriculum vitae for more than a half-dozen years, different from its Securities and Exchange Commission documents:
“Scott received a bachelor’s in accounting and computer science from Stonehill College.”
As it turned out, according to the Boston-area school, he had not gotten a computer science degree at all and graduated with the Bachelor’s of Science in Business Administration (Accounting).
An eBay spokesman I called today had no explanation for the discrepancy, except to note that its legal filings were correct and that it was an error due to the lack of cross-checking the Web bio, which was apparently posted by Thompson’s staff at the time.
Also without explanation — and perhaps more seriously — is that the false computer science degree claim somehow then made it into Yahoo’s SEC filings, as well as his Web site bio, when Thompson took the helm. (The inaccurate line about his schooling is in its latest filing and all others.)
Without providing further explanation of how it got there, Yahoo today called the mistake an “inadvertent error” and said it had no bearing on his ability to lead the Silicon Valley Internet giant.
But the long troubled company might be speaking too soon, given that the revelation was uncovered this morning by activist shareholder Dan Loeb of Third Point. Loeb has called into question the vetting process that Yahoo’s directors did to hire Thompson, as part of a proxy fight he is waging to gain several board seats.
And, while such an allegation is normal for an increasingly nasty battle, Loeb has hit his mark with deadly accuracy this time, putting into question both Thompson’s credibility and Yahoo’s obvious botching in its vetting of him.
“If there is a good explanation for the apparent discrepancies regarding the academic records of Mr. Thompson and Ms. Hart, we are confident that it will be provided promptly,” wrote Loeb in a letter to Yahoo’s board today. “However, in the event that there is no good explanation, we expect the Board to take immediate action.”
The Ms. Hart that Loeb was referring to is Patti Hart, the board member who ran Yahoo’s process for hiring a new CEO after it fired Carol Bartz — who does have a CS degree — last year. (In his letter today, Loeb also correctly called into question how she portrayed her own college degree in a more impressive fashion than was accurate.)
The search for a new Yahoo CEO was conducted by headhunter Heidrick & Struggles, which did not have Thompson on its list of candidates, since it had placed him at eBay many years before.
In fact, according to numerous sources, without involvement by Heidrick, it was Thompson who cold-emailed key Yahoo board members, nominating himself for the CEO job. He was quickly brought in for interviews and, presumably, a thorough vetting.
Despite that and despite the fact that eBay’s SEC filings did not list a computer science degree, Hart or others seem to have totally missed the discrepancies and it was added to Thompson’s official Yahoo bio and legal filings.
It’s not clear what happens next or if there are any legal implications, beyond a needed correction by Yahoo with the SEC — which already took the entire line about Thompson’s education off his Web bio today.
Yahoo’s not talking either, with its spokesperson declining to provide any explanation for its lapse or who had maintained that Thompson had that degree when he did not.
It’s essentially a mistakes-were-made-let’s-move-on defense.
I think not, for my part, and a number of prominent Silicon Valley people I spoke to today agreed that these issues tend to spin out of control.
“This is going to get very messy, very quickly,” said one person in a common sentiment I heard.
Maybe, and it’s not clear if the company has to release any details of how this occurred or if its board needs to investigate the situation.
In addition, Thompson himself is probably not at risk unless it can be definitely proved he was the one who misrepresented having the degree in the first place. He can simply say he had no idea who added it to the eBay Web site and that he did not notice it there on on the Yahoo Web site and SEC filings.
While that makes him look careless, how big a deal it becomes with shareholders, as well as Yahoo employees, is also an unknown. While a computer science degree is not a requirement for a CEO of a tech company — both Facebook’s Mark Zuckerberg and Microsoft’s Bill Gates dropped out of college and did pretty well in computer science anyway — tech resume padding, even inadvertent, is not a characteristic that is going endear Thompson to anyone.
Plus, it just handed Loeb a very potent weapon in his fight against Yahoo, the very day after the company said the hedge fund manager’s expertise was not “relevant” to gaining a board seat.
One thing’s for sure: Loeb is most certainly very good at vetting.
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