Disney hires CFO Hugh Johnston, who beat Peltz at Pepsi, exceeds expectations

Written by Christopher Palmieri

PepsiCo’s Hugh Johnston will discover a acquainted face when he joins The Walt Disney Firm subsequent month as CFO – activist investor Nelson Peltz.

Johnston, who has been Pepsi’s chief monetary officer since 2010, was a key participant in warding off Trian Fund Administration 10 years in the past when its founder Peltz started pushing the delicate drink and snacks large to both merge with a competitor or cut up into two corporations. Johnston argued towards the proposal. PepsiCo added advisor Peltz to its board in 2015, and Trian offered its shares the next 12 months.

“With Hue on board, Pepsi has finished job of convincing the Avenue that it has a plan for development,” mentioned Ken Shea, a Bloomberg Intelligence analyst.

Peltz is now looking for a number of seats on Disney’s board after amassing a $2.5 billion stake within the firm. It deserted the same push earlier this 12 months after Disney CEO Bob Iger introduced a cost-cutting plan. However Disney shares continued to underperform the Customary & Poor’s 500 Index, dropping about 3 p.c of its worth this 12 months.

Disney introduced the appointment of Johnston, 62, as its new chief monetary officer early Monday. He succeeds CEO Christine McCarthy, who resigned to take medical go away for her household in June.

The brand new CFO is predicted to convey a seasoned hand to different points at Disney. The world’s largest leisure firm is struggling to deal with shoppers’ shift from conventional TV channels to streaming companies. Iger, who returned to run Disney a 12 months in the past, mentioned he would possibly promote networks like ABC. He’s in search of a strategic companion for his sports activities firm ESPN and intends to purchase a 3rd of Comcast Corp’s Hulu streaming service.

Johnston, who first joined PepsiCo in 1987, was thought-about CEO Indra Nooyi’s right-hand man earlier than her retirement in 2018. He continues to advise present PepsiCo chief Ramon Laguarta in his efforts to develop the enterprise, such because the $3.85 billion buy of Rockstar Vitality . Drink in 2020.

Different strategic strikes included making an attempt to handle client issues about wholesome consuming by making smaller containers of sentimental drinks and snacks, similar to the corporate’s Doritos and Cheetos.

Underneath Johnston, Pepsi grew to become recognized for its capability to make and beat conservative monetary forecasts. The CEO was usually the general public face of the corporate on Wall Avenue, in investor shows and tv appearances. This might make him a candidate to succeed Iger, whose contract runs till 2026, based on Citigroup analyst Filippo Falorni.

“He’s been across the group,” Falorni mentioned in an interview. “He had a whole lot of operational expertise.”

Disney declined to remark or make Johnston obtainable.

Johnston, who serves on the board of Microsoft Corp. and HCA Healthcare Inc. He has no direct expertise in motion pictures, tv or theme parks, Disney’s core companies.

When Johnston joined Twitter’s board in 2016, many famous that he didn’t beforehand have an account on the social media website.

“Twitter Inc. might have discovered an answer to its consumer development drawback: add non-users to its board and get them to begin tweeting,” MarketWatch wrote on the time.

In a speech at his alma mater, Syracuse College, in 2012, Johnston mentioned new challenges are key to skilled development.

He mentioned: “For those who consistently work on growing your self and the abilities you possess, you’ll stay progressive and in a position to remodel in any setting or market you’re in.”

Then he distributed cans of Pepsi.