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Dan Loeb strikes first victory against Yahoo

Board member Patti Hart resigning; Yahoo announces commission to look into CEO Thompson's records

Financial trends and news by Steven Loeb
May 8, 2012 | Comments
Short URL: http://vator.tv/n/268d

If anyone out there is keeping score, I believe it is now Dan Loeb: 1, Yahoo: 0.

Less than a week after Loeb, the CEO of Third Point, made allegations that both Yahoo CEO Scott Thompson and board member Patti Hart had lied about their academic credentials, and demanded that they both be fired, one of them has decided to step down.

Hart, who is also the CEO of International Game Technology (IGT), will, at the request of the Board at IGT, not be seeking re-election to Board at Yahoo, it was announced in a Yahoo press release on Tuesday.

Hart released a statement today, saying she was departing “to eliminate activities that may interfere with my ability to carry out my commitments to IGT and its valued stakeholders."

The Chairman of the Board at IGT also released a statement, in which he stood behind Hart as CEO, stating that “the IGT Board of Directors has found no material inconsistencies in Patti Hart's academic credentials” but that that the Board believed “her service as a member of Yahoo!'s Board of Directors could become a distraction from her responsibilities to IGT.”

In a letter to the Yahoo Board last week, Loeb had accused Hart of falsely stating that she had received degrees in economics and marketing from Illinois State University, of which he said she received neither.

Is Thompson next?

With one of his targets out of the way, Loeb is sure to set his sights on the bigger fish: Thompson.

After sending another letter to Yahoo yesterday, in which Loeb demanded they open up their books to him, it was reported that Thompson had sent a company wide memo yesterday apologizing for the discrepancy on his resume, though no explanation was provided.

"We have all been working very hard to move the company forward, and this has had the opposite effect," Thompson wrote. "For that, I take full responsibility, and I want to apologize to you."

Despite the apology, Thompson seemed ready to continue on as CEO.

“I am hopeful that this matter will be concluded promptly," Thompson wrote. "But, in the meantime, we have a lot of work to do. We need to continue to act as one team to fulfill the potential of this great company and keep moving forward.”

While Thompson may be trying his best to hurdle forward through this crisis, hoping that it simply goes away somehow, Yahoo is taking the matter much more seriously, announcing Tuesday that they were forming a special committee to review both Thompson’s academic records and “the facts and circumstances related to the review and disclosure of those credentials in connection with Thompson's appointment as CEO.”

In his letter yesterday, Loeb leveled serious accusations at the Yahoo Board, saying they hired Thompson at the expense of more qualified people recommended by Third Point.

“We believe the decision to reject Third Point’s nominees was pretextual and not made in good faith. As shown above, it appears the Nominating Committee would rather recommend an individual to the Yahoo! Board who submitted a false resume than the highly qualified individuals nominated by Third Point,” he wrote.

The letter seems have put some extra pressure on Yahoo, as they stressed“the urgency of the situation” and guaranteed that they would “make the appropriate disclosures to shareholders promptly upon completion of the review.”

(Image source: tech2.in.com)


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