Yahoo Inc is replacing its CEO for the third time in as many years, and giving three board seats to a hedge fund led by Daniel Loeb, putting him in a strong position to influence strategy at the struggling Internet company.
Chief Executive Scott Thompson stepped down on Sunday, 10 days after Loeb accused him of padding his biography by faking a computer science degree. Loeb’s Third Point LLC is one of Yahoo’s largest shareholders with a 5.8 per cent stake.
Yahoo did not give a reason for Thompson’s exit but said the company’s global media head, Ross Levinsohn, will be interim CEO. It also said it had settled a proxy battle with Third Point and will nominate three of the fund’s slate of four candidates to the board, including Loeb.
Separately, the Wall Street Journal reported on Monday that before resigning as chief executive of Yahoo over the weekend, Thompson disclosed to the company’s board of directors and several colleagues that he has been diagnosed with thyroid cancer. The paper had sourced the report to people familiar with the matter.
The decision to step down from Yahoo was in part influenced by Thompson’s cancer diagnosis, a person told the Journal. The diagnosis had occurred in recent days while the board was investigating why the executive’s academic record had erroneously included a computer science degree, according to the newspaper.
Thompson’s departure after just four months on the job throws into question the future of Yahoo as it struggles to revive growth amid fierce competition from the likes of Google Inc and Facebook Inc, and produce a long-term strategy to convince investors to reverse its share slide.