Yahoo Inc. director Patti Hart will not seek re-election to Yahoo’s board, according to a source familiar with the matter, as the Internet company finds itself engulfed in a controversy over its new chief executive’s educational background.
Ms. Hart led the search committee that hired Scott Thompson, the president of PayPal, to take the CEO reins at Yahoo in January.
Last week, an activist hedge fund waging a proxy battle against Yahoo revealed that Mr. Thompson did not have a college degree in computer science as was stated in his official company biography and in Yahoo regulatory filings with the U.S. Securities and Exchange Commission.
Yahoo has acknowledged that Mr. Thompson does not have a computer science degree, initially calling the discrepancy an “inadvertent error.” Yahoo later said its board of directors will investigate the matter.
Mr. Thompson issued an apology for the fallout from disclosures about his academic credentials in an e-mailed memo to Yahoo employees on Monday, a copy of which was seen by Reuters.
“I want you to know how deeply I regret how this issue has affected the company and all of you,” Thompson wrote in his first extended memo to employees since the disclosures emerged on May 3. “We have all been working very hard to move the company forward and this has had the opposite effect. For that, I take full responsibility, and I want to apologize to you.”
Mr. Thompson added that he would “respect” the board's plans to conduct a thorough and independent review.
“I am hopeful that this matter will be concluded promptly,” he wrote. “But, in the meantime, we have a lot of work to do.”
A Yahoo board member since June 2010, Ms. Hart is the chief executive of electronic game products company International Game Technology. International Game was not immediately available for comment.
According to the person familiar with the matter, Ms. Hart’s exit from Yahoo’s board is being driven by pressure from the board of International Game Technology, “which doesn’t want her to be distracted.”
Yahoo was not immediately available for comment.
The controversy marks the latest setback for Yahoo, which is trying to revive its revenue growth and is facing a bitter proxy fight with Third Point, it’s largest outside shareholder.
Third Point has called for Yahoo to turn over all records related to Mr. Thompson’s hiring.
Ms. Hart also was accused by Third Point of embellishing her educational record. Third Point alleged last week that she has a degree in business administration, rather than in marketing and economics, as was stated in regulatory filings.
Yahoo confirmed that Ms. Hart has a bachelor of science degree in business administration with “specialties” in marketing and economics from Illinois State University.
Ms. Hart’s exit would mark the latest change to Yahoo’s board, amid long-running investor discontent with the company’s performance and management.
In February, Yahoo said that Chairman Roy Bostock and three other directors would step down. One month before that, Yahoo co-founder Jerry Yang resigned from the board.
Ms. Hart’s plans not to seek re-election were first reported by the technology blog AllThingsD.com, which cited unnamed sources.Report Typo/Error
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