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Will Yahoo CEO's misstep kill company momentum?

Sharon Gaudin | May 7, 2012
All the momentum and vision that Yahoo CEO Scott Thompson has been building for the struggling company may have been thrown off course.

All the momentum and vision that Yahoo CEO Scott Thompson has been building for the struggling company may have been thrown off course.

Yahoo said late Thursday that its board of directors is looking into a discrepancy in the new CEO's resume that likely means big trouble not just for Thompson but for the company that he's been steering since January.

"Resume-padding is the most bush-league of the many dissimulations available to ambitious executives," said Hadley Reynolds, an analyst with IDC. "His enemies must be amazed at their luck in unearthing a public misrepresentation issue that calls Scott Thompson's ethical judgment, professional competence, and basic intelligence into question all at once."

The issue, added Reynolds, may be enough to make Thompson's reign at Yahoo a short one and put an end to his plans for reviving the financially struggling company, that was once an Internet pioneer.

"He can't survive this assault, and the Yahoo board will be left to its own devices once again," he said. "I expect this episode to hasten Yahoo's transition to its alternative future, just not the one Scott and the board probably had in mind."

Thompson's resume and the company's regulatory filings with the U.S. Securities and Exchange Commission overstated his technology background to include a degree in computer science. The company called it "an inadvertent error."

Thompson received a bachelor of science degree in business administration with a major in accounting from Stonehill College in Easton, Mass. However, Thompson's resume claimed that he also held a degree in computer science.

The claim also made it onto Thompson's biography page on Yahoo's site, as well as on Paypal, where Thompson had served as president. His college credentials are no longer on his Yahoo bio.

In statements to the news media, Yahoo called the misrepresentation "inadvertent," but Reynolds is doubtful about that.

"There's no credible way that 10 years or so of public misrepresentation could be inadvertent," he said. "Also, I ... assume that Scott is personally responsible for the accuracy and veracity of Yahoo's SEC filings under Section 302 of Sarbanes-Oxley. If that's the case, he's at least culpable under those regulations for misrepresenting material info pertinent to investors, inadvertent slips in the curriculum vitae or no."

Rob Enderle, an analyst with the Enderle Group, said the issue should result in Thompson's dismissal from the company.

It's common for large companies to have policies that call for the termination of an executive who misrepresents his background, Enderle said. This kind of discrepancy also speaks to the person's ethics, which would call into question his action as leader of a major company, he said.


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