In a decisively dramatic turn of events, Disney declared on Monday, symbolizing an unexpected regime change, that Hugh Johnston, the long-standing chief financial officer of PepsiCo, would be joining The Walt Disney Company as its new CFO. This announcement comes as Disney casts about for strategies to buoy a flagging share price and mitigate streaming losses, a daunting challenge for Johnston, one of the most prominent figures in American business finance.
Johnston’s tenure at PepsiCo exhibited a trajectory spanning 34 years, characterized by multiple roles within the food and beverage behemoth, culminating in ascending to the position of CFO in 2010. Johnston plans to commence his appointment at Disney on Dec. 4, reporting directly to CEO Bob Iger.
Disney hires veteran PepsiCo finance chief Hugh Johnston as new CFO https://t.co/zYdExjEEkY
— CNBC (@CNBC) November 6, 2023
While reveling in his new role, Johnston appreciated the uniqueness of Disney stating, “Disney is such a storied company, with the most beloved brands in the world and a strong financial foundation to support the company of the future that Bob and his team are building. Very few companies have withstood the test of time that Disney has, making the company as rare as it is special.”
Johnston’s appointment follows the resignation of Disney’s previous CFO, Christine McCarthy, amid massive company restructuring under Iger’s stewardship, which marked his second tenure as CEO beginning approximately a year ago. This reshuffling phase witnessed the unfortunate dismissal of 7,000 employees over multiple stages.
Disney continues to contemplate a series of significant transitions, including the possible offloading of ABC and the search for tactical partners for ESPN as the conventional pay-TV industry recedes, haemorrhaging millions of customers annually. To guide these transitions, the company has employed former Disney executives Tom Staggs and Kevin Mayer as consultants.
However, new challenges have beset Disney in the form of pressure from activist investor, Nelson Peltz, as it grapples with deficits in its streaming business and a stock plummeting roughly 2% this year. Peltz’s firm, Trian Fund Management, has multiplied its Disney shares to an approximate 30 million and is purportedly agitating for multiple board seats, including one for Peltz himself.
Parallelly, Disney conducts a succession search for CEO as Iger resumed the role last November, with intentions set on identifying Iger’s successor by early 2025.
Disney will present its quarterly earnings this Wednesday after closing bell.
In conclusion, Disney’s announcement of Hugh Johnston’s appointment as CFO amidst the present turmoil represents the entertainment titan’s commitment to imagineering its way back to fiscal health. Johnston’s success in this endeavour will be closely scrutinized by stakeholders amid heightened expectations. The days ahead will reveal how Disney’s restructuring, boardroom battles, and CEO succession plans unfold. Regardless of the challenges, Disney attempts to navigate, it is undoubtedly a critical juncture, and the watching world remains entranced, timelessly fascinated by the grand spectacle of the magical realm of Disney.