Yahoo Reaction Paper
Reaction Paper – Yahoo! C.E.O. Resigns Over Padded Resume
On the 13th of May, 2012, the Yahoo! C.E.O, Scott Thompson decided to part ways with the company. His reason for resignation: he had had surgery for thyroid cancer several weeks earlier and was on medication which in turn could affect his performance as C.E.O. However, this event was the culmination of a tumultuous period at Yahoo! And if I were a decision maker in this case, aware of the recently opened can of worms, I would have definitely asked Thompson to resign.
On the 3rd of May, 2012, Daniel Loeb, Yahoo’s largest external shareholder, who then controlled 5.8% of the company through his hedge fund – Third Point, launched an attack on Yahoo! and its new C.E.O., alleging that Scott Thompson had lied on his resume about his academic qualifications. This was a result of a proxy war between Yahoo! and Loeb, who being a major stakeholder, wanted his choice of candidates on the board and saw Thompson as an obstacle. These allegations snowballed into a huge crisis during a trying period for the organisation. After rejecting a profitable takeover bid from Microsoft, steep competition from other internet giants and top level management issues, this situation weakened the company further.
Thompson, in his resume, claimed to have a college degree in accounting and computer science from Stonehill College near Boston. This “claim” was published on the company’s bio and annual report, a legal document whose validity and authenticity is confirmed by the CEO. He even certified these degrees in the Securities and Exchange Commission filings. After receiving Loeb’s letter stating that Thompson only had an accounting degree from Stonehill and the college didn’t even offer a computer science degree at the time, Yahoo! initiated an investigation. Upon receiving the findings of the investigation, Yahoo! conceded that Thompson in fact only had an accounting degree and called the mistake an “inadvertent error”.
Fudging
On the 13th of May, 2012, the Yahoo! C.E.O, Scott Thompson decided to part ways with the company. His reason for resignation: he had had surgery for thyroid cancer several weeks earlier and was on medication which in turn could affect his performance as C.E.O. However, this event was the culmination of a tumultuous period at Yahoo! And if I were a decision maker in this case, aware of the recently opened can of worms, I would have definitely asked Thompson to resign.
On the 3rd of May, 2012, Daniel Loeb, Yahoo’s largest external shareholder, who then controlled 5.8% of the company through his hedge fund – Third Point, launched an attack on Yahoo! and its new C.E.O., alleging that Scott Thompson had lied on his resume about his academic qualifications. This was a result of a proxy war between Yahoo! and Loeb, who being a major stakeholder, wanted his choice of candidates on the board and saw Thompson as an obstacle. These allegations snowballed into a huge crisis during a trying period for the organisation. After rejecting a profitable takeover bid from Microsoft, steep competition from other internet giants and top level management issues, this situation weakened the company further.
Thompson, in his resume, claimed to have a college degree in accounting and computer science from Stonehill College near Boston. This “claim” was published on the company’s bio and annual report, a legal document whose validity and authenticity is confirmed by the CEO. He even certified these degrees in the Securities and Exchange Commission filings. After receiving Loeb’s letter stating that Thompson only had an accounting degree from Stonehill and the college didn’t even offer a computer science degree at the time, Yahoo! initiated an investigation. Upon receiving the findings of the investigation, Yahoo! conceded that Thompson in fact only had an accounting degree and called the mistake an “inadvertent error”.
Fudging