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Silicon Valley hated Scott Thompson before yesterday for all the Facebook (FB) patent stuff. Yesterday's news about his fudged educational credentials gave them the excuse to start screaming for him to be removed.
There's a huge credibility issue now for Thompson. How is he ever going to be trusted in the eyes of his employees now -- let alone his investors? From now on, he'll be standing up moving his lips and people will only be able to think "why did you fib about studying Computer Science when you didn't?" I just don't know how that stigma will ever lift for him, at least at Yahoo!
I guess Scott could plead ignorance and that some underling made the error and he never saw it. But that just doesn't fly. What underling puffs up a boss's resume? There's no way any CEO of any company -- even if it's 12 employees -- doesn't go through his own biography with a fine-toothed comb to make it sound as puffed up as possible. They always get in all their charitable work and awards from the local Rotary Club in the bio. No one will buy he didn't see this.
And guess what? Fibbing about his education wasn't Thompson's only breach of Yahoo!'s code of conduct. He currently sits on 2 outside boards of directors of public companies: Splunk and F5 Networks. Yahoo! only allows officers to serve on 2. He's in violation of that requirement since Splunk's IPO. Here are Yahoo!'s corporate governance guidelines updated on April 26, 2012. And here is the part relevant here: "no executive officer should serve on more than two public company boards, including the Company's board." And, to add insult to injury, Thompson is also on 3 other private company boards.
Scott: Is it too much to ask that you wouldn't serve on any of the 5 other boards of directors you currently serve on, while you try to put your head down and spend 100% of your time on turning around Yahoo!? I mean -- in addition to all these other company boards -- Thompson's also currently on F5's Compensation Committee and its Nominating and Governance Committee. The CEO of Yahoo! should serve on ZERO outside boards until the company's stock price gets above $30.
It's just yet another piece of evidence that Thompson's decision-making is suspect and this is a guy completely obsessed with puffing up his own ego. He just had to be CEO. He just had to add the Computer Science part to his resume. He just had to serve on 5 boards so people would think he's a serious Silicon Valley heavyweight.
Make it stop!
But this whole scandal turns the attention squarely back on the biggest bunch of "doofuses" in Corporate America -- the Yahoo! board.
Just a day before Dan Loeb dropped this bomb on their heads, they were telling shareholders how they'd carefully reviewed over 100 possible director candidates and -- after their exhaustive search -- had determined that Loeb lack the proper "skill-set" to serve on such an esteemed board.
What a joke.
Those clueless boobs -- led by the incompetent and equally fib-prone Patti Hart on the Nominating Committee -- seemingly did NO due diligence on Scott Thompson. Thompson apparently dusted off his resume while at eBay in December and reached out to Yahoo!'s board asking for the top job at Yahoo! Stories I have heard suggest he didn't think John Donahoe wasn't leaving eBay anytime soon and Thompson wanted to be "the man." I've also heard Frank Quattrone recommended Thompson to the board.
Within 2 weeks of first contact, Thompson was announced as the CEO. As I've been told, there were no other candidates in the mix.
A national search firm wasn't involved here and apparently there was no vetting of his background.
If this is the kind of slipshod hiring process Yahoo!'s board does, why should shareholders trust they are competent to negotiate with Facebook about patents, with Softbank about Yahoo! Japan, and with Alibaba Group about their stake? Oh, and why are they competent to oversee turning around the core business?
What's even more galling for Yahoo! shareholders is that Yahoo! -- in arguing why Loeb didn't deserve a spot on the board -- said: "yeah, we had a bad board before but all the old fogies like Bostock are getting the boot, so you can't criticize the new crop of directors." Well, you know what? You sure can criticize them.
Loeb has said previously that it is ridiculous to let the bad board of the past select their successors. Why should shareholders have to accept the same bad crew who made terrible decisions making another bad decision picking their successors? Let's let the shareholders select their representatives on this board.
I can't think of any company that has ever been in such a dire state of paralysis as they will be if Thompson and this board are allowed to stay on.
It's time to cut the cord with these jokers once and for all and for Yahoo! shareholders to take back control of this company.
I am sure that all the top proxy advisory firms will be very sympathetic to Yahoo! investors' plight.
[Long YHOO]
