Yahoo ousts CEO Scott Thompson, and I ask: 'What the frak?'
So let me see if I understand rightly. It's okay for CEOs to lie, steal, cheat, take ungodly salaries and -- worse -- huge bonuses while companies flounder, commit insider trading and abuse shareholder trust in just about every way possible, but lie on the résumé and it's adios, baby? Somebody wake me from this nightmare -- or perhaps Scott Thompson, who is out as Yahoo chief executive.
Yahoo tacitly confirmed Thompson's exit today, in an announcement about Ross Levinsohn assuming position of interim CEO: "Levinsohn replaces Scott Thompson, former chief executive officer, who has left the company". That is one big middle finger. There is no explanation -- not even a fine he left for personal reasons -- or praise for his short time running Yahoo. Thompson leaves with a big stake in his heart implanted from behind.
A Little Accounting
Before defending Thompson, appropriate disclosure: I've never lied on a résumé, generally because being honest is a personal philosophy and falsehood gives an employer easy grounds for dismal later on -- well for lowly minons like me, and perhaps you, who don't pull in 7-figure incomes (or more) for high-finagle executive positions. I expected Thompson to weather this insignifiant scandal just fine. His ouster for something so petty, when many CEOs do so much worse, is simply outrageous.
So what if Thompson's bachelor degree is in accounting not computer science? Surely, given Yahoo's financials, he should be faulted not for what he claimed, but what he didn't. Yahoo could use a little more accounting right now, and a numbers guy doing it. C`mon, Thompson didn't claim that his degree is from Harvard rather than Stonehill College. It's a little thing.
Some companies would reward such behavior. In the video clip above, Kevin Bacon interviews for an advertising job in John Hughes movie "She's Having a Baby". Bacon lies on his résumé and gets caught doing so: "Aside from your social security number, there isn't one piece of information in there that is true. You have set new standards for lying in the job market". But Bacon's résumé creative writing skills and desperation to work gets him the job anyway. He's hungry, and the employer likes that.
What's wrong with Yahoo shareholders and board of directors? Is Thompson not hungry enough for you? You can't trust him because of a little white lie on his résumé? Get a life! Losing Thompson less than six months on the job, when Yahoo is struggling so much, is disastrous. Someone else thinks so, too. Shares are down nearly 2 percent in after-hours trading. Will it be bloodbath when markets open, or will shares rise in support? Or perhaps no real change whatsoever? No matter what shareholders feel, Thompson's departure -- eh ouster -- is bad by most any measure.
We Can Lie, Just Not You
Now if only there was an example here -- public companies putting CEOs on notice for bad behavior. There's little chance of that. These execs practically get away with murder (surely some do). Sadly perhaps the lesson is something else: Don't get caught, and Thompson did.
So that's really the crime here, not that Thompson lied on his résumé but that Yahoo is embarrassed and made vulnerable by the public disclosure -- that some shareholders wanted Thompson gone. Ties are severed to protect corporate image and deflect liability from shareholder retaliation (you know, lawsuits). Thompson hangs in the wind, so Yahoo can go on.
But it's Yahoo hanging in the wind, beret of leadership. Worse, Yahoo caved to a shareholder group, by granting seats on the board of directors. If there is an example here, it's a bad one: Bully enough and Yahoo caves. Hedge Fund Third Point uncovered Thompson's résumé white lie and used it in a proxy battle for the Internet giant. As part of today's stunning Thompson departure, Roy Bostock is out as chairman of the board (replaced by Fred Amoroso), while four other members depart, too. Joining the board, as part of a settlement to the proxy fight, Third Point CEO Daniel Loeb, joined by Harry Wilson and Michael Wolf.
I'm awestruck. Eleven days ago, Yahoo said in a statement that Loeb was unqualified:
The board continues to believe that Mr. Loeb himself does not bring the relevant skill set and experience to the board, particularly in comparison to the candidates selected by the board. In addition, we believe that, based on the specific qualifications of Third Point's nominees relative to Yahoo!'s business and opportunities, the candidates nominated by the board's Nominating and Governance Committee are significantly superior to those proposed by Third Point.
So, what? It's okay for Yahoo to lie about Loeb's qualifications to serve on the board but Thompson is grossly negligent for fibbing on his résumé?