May 04, 2012, 9:10 AM — Yahoo is trying its best to brush off the controversy over CEO Scott Thompson's biography, which credits him with earning a B.S. in computer science from Stonehill College.
He didn't. Thompson, who took over in January for fired Yahoo chief executive Carol Bartz after several years running eBay's PayPal, does have a bachelor's degree from Stonehill in accounting, but not computer science.
The fake credential appeared on Thompson's bio listed on eBay's website, though not in the online auction giant's filings with the Securities and Exchange Commission.
But the bogus degree is listed in Yahoo's SEC filings, as well as Thompson's bio on Yahoo's website. And that's caused activist shareholder Dan Loeb of Third Point, long a critic -- and rightly so -- of the Internet pioneer's board of directors and upper management to demand an explanation. And if the explanation is insufficient, Loeb wants the board to "take immediate action," as he wrote in a letter to the company's directors.
We can safely assume that the "immediate action" to which Loeb is referring isn't for the company to correct Thompson's website bio. Loeb will want Thompson canned.
It's probably tempting for some to dismiss this as a minor outrage manufactured by a disgruntled shareholder who is trying to get his own slate of directors on the company's board so he can begin throwing around his weight.
You can pretty much guarantee that's how many -- maybe even most -- of the directors feel, especially since the last thing they want to do is launch yet another search for a CEO to turn around the struggling company. Yahoo has enough problems competing with the likes of Google and Facebook to endure many more months of turmoil and lack of firm leadership.
But if Thompson can't adequately explain how the false academic claims appeared on his bio on the websites and in Yahoo's SEC filings, the board will have no choice but to demand his resignation.
Not, however, because of Loeb, though he's certainly not going to let up on the issue. The pressure instead will come from the bottom. Because no matter how successful Thompson was at PayPal, no matter how well-liked he is at Yahoo, employees there will view him as a fake -- and that will destroy his credibility and his ability to lead.
Imagine the high-ranking Yahoo executives who perhaps viewed themselves as viable candidates for the corner office. How do you think they'll feel about reporting to a guy who appears to have padded his bio with a phony academic credential?
Same with the rank-and-workers who will never rise to CEO, but expect some kind of fairness in the place where they work?