Yahoo! director who led CEO search stepping down

9 May 2012

The director who led the hiring of Yahoo! CEO Scott Thompson, who has apologised to Yahoo! employees for an error in his educational credentials, will not seek re-election on the digital media company’s board.

Patti Hart, the chief executive officer of International Game Technology (ITG), informed the Yahoo! board that the IGT board requested she not seek re-election as a Yahoo! director at the upcoming 2012 annual meeting of Yahoo! shareholders.

In a statement regarding her giving up her seat on Yahoo!’s board, Hart cited her duties as CEO of IGT, a maker of electronic gaming machines.

“It has been my privilege to serve Yahoo stockholders,” Hart said in the statement. “However, my primary responsibilities are to serve as chief executive officer of IGT and to eliminate activities that may interfere with my ability to carry out my commitments to IGT and its valued stakeholders.”

Review of Yahoo! CEO Scott Thompson’s hiring and background

Yahoo!’s board yesterday said it has appointed a three-person committee and retained a law firm to review Thompson’s educational background and the ‘facts and circumstances’ surrounding his hiring.

Activist hedge fund Third Point’s founder and chief executive, Dan Loeb, brought up Thompson’s academic credentials in a letter to Yahoo’s board, claiming Thompson does not have a computer science degree despite what was stated on his official company biography and in regulatory filings with the U.S. Securities and Exchange Commission.

Third Point, which owns 5.8pc of Yahoo!’s shares, has been battling to join Yahoo’s board.

Hart led the search committee that hired Thompson, the president of PayPal, to take the CEO role at Yahoo! in January.

In a memo sent to Yahoo! employees on Monday, Thompson said he takes “full responsibility, and I want to apologise” to the company’s employees. He did not say he has plans to step down.

The controversy marks another blow to Yahoo!, which has been working to revive its revenue growth while having gone through four CEOs in five years.