updated 03:55 am EDT, Mon May 14, 2012
Head of global media will become interim CEO
The board of Yahoo has accepted the resignation of former CEO Scott Thompson and named Ross Levinsohn, its head of global media, to be the interim CEO. Fred Amoroso, who just recently joined the board of the troubled Internet search engine, was named chairman, and Third Point hedge fund manager Dan Loeb, who had been pushing for Thompson's removal, and two of his proposed directors will join the board.
Loeb, who owns just under six percent of Yahoo, originally levelled charges against Thompson earlier this month, saying that Thompson did not have a degree in computer science as listed on his resume. Loeb had been attempting to replace four members of the board, only to have them reject him as unfit to run the company. Loeb then dropped his bombshell, which Thompson and the board initially brushed off as an "inadvertent error."
Thompson did graduate from Stonehill College in Boston in 1979 with a bachelor's degree in business administration and a major in accounting, but his resume said he had a computer science degree. Stonehill didn't begin issuing CS degrees until four years after Thompson left.
Thompson tried to paint the mistake as the error of a headhunting firm, and finally claimed he had never submitted a resume to Yahoo before being hired, but investor pressure over the misstatement ultimately led him to resign, though he also mentioned in leaving that he had been recently diagnosed with thyroid cancer.
In exchange for Loeb and two of his colleagues taking spots on the board, Third Point has agreed to support the election of the rest of the board's choices, avoiding a proxy contest. The three will replace existing Yahoo board members who were not planning to stand for re-election and who are stepping down effective immediately.
In his first memo to Yahoo employees, Levinsohn acknowledged the problems the company has had, saying "to be a Yahoo [employee] is to be resilient," but characterized Loeb's boardroom coup as "a transformation and renewal" that began in August and "is now complete." He said the company has built momentum over the last few months and is "achieving genuine and meaningful successes in the marketplace every day, and heading in the right direction" despite the "very bumpy road we've traveled."
Here is the full text of Levinsohn's memo, which was leaked to AllThingsD:
We have just announced very significant news regarding the leadership of our Company. The Board of Directors has appointed Fred Amoroso Chairman of the Board and has asked me to take on the role of interim Chief Executive Officer, to replace Scott Thompson, who has left the Company. In addition, the Board also announced that it has reached a settlement with our major shareholder Third Point LLC, enabling us to avoid a proxy contest.
As a part of the Board’s agreement with Third Point, Daniel S. Loeb, Harry J. Wilson and Michael J. Wolf are joining the Yahoo! Board. In connection with their addition, the members of our Board who were not planning to stand for re-election have decided to step down immediately to accelerate the leadership transition for the new Board in advance of the annual meeting. We’ve attached the press release outlining all of these changes for your review.
Importantly, today’s announcements lay to rest the unfortunate and serious distractions surrounding our senior leadership and the composition of our Board going forward. I know that Fred and the new Yahoo! Board are looking forward to working constructively to stabilize the leadership team and to further accelerate the progress we have made in reinvigorating Yahoo!, executing against the Company’s strategic initiatives and enhancing stockholder value.
For my part, I want you to know that I am honored to lead this great company as interim Chief Executive Officer, and I accept that responsibility with enthusiasm and confidence for three reasons above all others: As I have said since I joined Yahoo in 2010, I believe in the tremendous strength and value of our brand, and in our relationship with our users and partners; I believe in the substantial organizational, operational and strategic progress we have made in recent months in spite of the internal and external challenges we have faced; and most of all, I believe with all my heart in all of you and your dedication to continuing to make this company great. What we achieve in this company is substantial on each and every day, on a scale rarely matched across the globe. I’m incredibly proud to be a part of this team.
This may seem like a great deal of news to digest, but as you are all keenly aware, Yahoo! is a dynamic, global company in a dynamic, global industry, so change — sometimes unexpected and sometimes at lightning speed — is something we will continue to live with and something we should embrace. However, today’s announcements really boil down to this: following these changes, a transformation and renewal at the Board level that began in August of last year is now complete.
Of course, these changes will also raise new questions along with those it answers. I invite you to bring those questions to me, or any member of the executive leadership team, and we will answer them as forthrightly and promptly as we can. Please also look for an invite and plan to attend an all-hands meeting we are organizing for Monday afternoon — we look forward to speaking with you further at that time.
In the meantime, I know there is one thing we should definitely all be doing in light of this news, and that is to focus on the momentum we’ve created over the last few months. Many of you have heard me talk about the possibilities we have, and about the opportunities in front of us. In spite of the very bumpy road we’ve traveled, we are achieving genuine and meaningful successes in the marketplace every day and heading in the right direction.
You deserve at least as much from your leadership as you give. I take that responsibility very seriously and promise to give you my all while I’m serving as interim CEO.
I want to close by thanking you for your commitment to Yahoo! and your continued hard work. To be a Yahoo is to be resilient, and you are very much appreciated. Let’s go on the offensive starting today!
Interim Chief Executive Officer
New Yahoo CEO Ross Levinsohn