Yahoo chief Scott Thompson under cloud over false degree claim

Yahoo CEO Scott Thompson may have to quit his job just four months after taking over the troubled internet company due to what a shareholder has alleged to be a fake claim about his academic credentials.

A major Yahoo shareholder who made the allegation on Thursday is now leading a campaign to oust Thomson on grounds of unethical conduct. In a letter yesterday, activist hedge fund manager Daniel Loeb called on Yahoo's board to sack Thompson on Monday or face possible legal action.

Loeb, who controls a 5.8-per cent stake in Yahoo through his hedge fund, Third Point LLC wrote, "Mr. Thompson and the board should make no mistake: this is a big deal. CEO's have been terminated for less at other companies."

Thompson's troubles stem from an exaggerated claim about his education at Stonehill College, a small school near Boston where he graduated in 1979. Since the announcement of Thompson's appointment in early January, Yahoo had included two bachelor's degrees - one for accounting and the other for computer science - on the executive's biography.

Besides appearing on Yahoo's own website, the dual degrees also appeared in a legal document filed 27 April with the Securities and Exchange Commission.

After Loeb took up the matter, Yahoo confirmed that Thompson had only received an accounting degree from Stonehill and initially attributed the misrepresentation about the computer science degree to an "inadvertent error." On Thursday, Yahoo issued another statement to announce its board would look into what happened and disclose its findings to shareholders but did not set a timetable for completion of the investigation.