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Yahoo CEO Gone Over Resume Debacle; Heidrick & Struggles Strikes Back

by
John Zappe
May 14, 2012, 2:01 pm ET

Yahoo’s beleaguered CEO Scott Thompson is out, in a shakeup that replaced the company’s chairman of the board and added new directors chosen by a dissident shareholder.

Unable to ride out the storm over a false academic degree listed on his resume, Thompson left the company over the weekend. Yahoo issued a statement Sunday mentioning Thompson’s name briefly, and only in connection with announcing his replacement, Ross Levinsohn, as interim CEO. Levinsohn was Yahoo’s executive vice president and head of global media.

The decision to replace Thompson over his false claim of holding a degree in computer science jelled late Friday, after search firm Heidrick & Struggles denied it had anything to do with the falsification. In meetings he held to attempt to calm the waters last week, Thompson blamed a staffer at an unnamed headhunting firm for making the resume mistake, which he failed to notice for eight years.

That firm would have been Heidrick & Struggles, which was handling his placement at eBay.

That did it, for the normally reserved firm. “The CEO of Yahoo has made potentially damaging allegations about our firm that are simply not true and cannot be allowed to stand in the public record,” wrote CEO Kevin Kelly in a letter to company staff.

“The media articles in question have indicated that the Yahoo CEO told members of his senior staff that, many years ago, a junior member of our firm invented an academic credential for him in the course of preparing standard profile materials. Based on information in our possession, this allegation is verifiably not true and we have notified Yahoo to that effect.”

That information reportedly is a resume Thompson gave the company.

According to a report on All Things Digital, which posted a copy of the Heidrick & Struggles letter, a similar letter was sent to Yahoo’s board.

What’s not discussed in the letter or in articles about the Heidrick & Struggles letter is whether the firm did a background check on Thompson to verify the information. Heidrick & Struggles has not yet returned a call asking about that.

What is clear is that dissident shareholder Third Point and its founder, Daniel Loeb, did look into Thompson’s background. In the last several weeks, Loeb learned that Thompson’s alma mater, small Catholic Stonehill College, did not even offer a computer science degree until four years after he graduated — with an accounting degree.

Loeb and Third Point, which was waging a proxy fight with the Yahoo board, called for Thompson’s resignation because of the falsification.

That proxy battle ended Sunday, when Yahoo agreed to appoint three Third Point nominees to its board. Board Chairman Roy Bostock stepped down, as did four other members.

In a different post, All Things Digital said Thompson won’t be getting the usual large severance package that typically is given to ousted executives. Instead, the Yahoo board intends to say he left for cause. It’s relying on a clause in his letter of offer requiring him to “abide by the Company’s policies and procedures.”

On the other hand, if Thompson’s departure was voluntary — and the Wall Street Journalsays his recent diagnosis of thyroid cancer may have helped him decide to leave — then he may be obligated to return the $7 million he was given in upfront bonuses. His employment offer says he has to return the money if he leaves voluntarily within a year of his hiring.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Jordan Clark

    Dun Dun Dun!!!!!!!! And the liar finally plays the tune of the Pied Piper. . . .

    About time if you ask me, what a mess, completely destroyed Yahoo’s, H&S, and the board of director’s reputation. The sheer arrogance and selfishness of Mr. Thompson comes to full bear, I believe another famous figure head once tried to pull the same thing, his motto “Deny Deny Deny!” Richard Nixon at his finest. . . .

    Although really we only have ourselves to blame, since we let all the banksters get away with the “I had no idea what was going on,” and get away with it, only encourages others to give it a whirl.

  2. Jordan Clark

    The worst part really is now Yahoo! was forced to let the leadership from their largest investment firm take the ropes and God only knows what that does to a company’s “innovation.” If you thought Yahoo was going stale before its only going to get worse when your dancing to the tune of investment heads instead of technical experts.

  3. Paul Tseko

    Scott Thompson, you and you alone are responsible for the content of your resume! It is that simple.

    Spin it however you like but my suggestion is simple: Own it!

  4. Morgan Hoogvelt

    Does this mean he will get millions of dollars to walk away like every other CEO who tanks?

  5. Keith Halperin

    @ Jordan: Hear, hear!
    Will it make any long term difference in business/recruiting practices? I doubt it, though.

    -kh

  6. Carol Schultz

    This article is so great. I especially love how both Thompson and H&R are pointing the finger somewhere else rather than being accountable for not doing their jobs. Thompson didn’t notice that there was an extra degree on his resume? Really?! And with the overpriced fees H&R charges you’d think they could verify a simple thing like a degree.

  7. Jordan Clark

    @Morgan: yes and no, according to the article Thompson will not get a severance package however the debate is over the 27 some odd million dollar sign on bonus’ that Yahoo! awarded him when he first accepted the position. . . according to the document Thompson signed he only has to reimburse Yahoo! if he voluntarily leaves the company before 1 year, so its up in the air on that one, one way or another he’ll come out the richer I’m sure!

  8. Kelly Blokdijk, SPHR

    I’m glad that such a high-profile example of dishonesty ultimately resulted in actual consequences.

    It would definitely be interesting to learn what happened or didn’t happen during the background checking process back then.

    As if the original resume lie wasn’t bad enough, when I saw Thompson’s sorry attempt to blame the low-level H&S staffer for the mistake, I flipped. What a joke!

    That scenario made absolutely no sense at all and he is a gigantic fool for thinking anyone would believe that and let it go…

    I’ve written tons of resumes, profiles, bios and website “about” content for other people and NEVER once had anything published, posted or shared without the subject’s express approval and validation of accuracy and completeness.

    Same goes for internal organization announcements and external press-release content. Under no circumstance could I imagine someone (especially at a senior level) nonchalantly allowing some third party person to write something about them without approving the final edits. That just doesn’t happen!

    ~KB @TalentTalks

  9. Resume Padding – high Profile | The EHS post

    [...] You can read in more detail  here. [...]

  10. Edward Woycenko

    In my opinion, everyone involved in this issue is at fault. It is the responsibility of the individual to know what is contained in the body of his/her resume and it is the responsibility of the company and the search firm to conduct reference checks prior to extending an offer to an individual.

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