Disney taps CFO Hugh Johnston who fended off Peltz at Pepsi, beat forecasts
By Christopher Palmeri
Hugh Johnston of PepsiCo Inc. will encounter a familiar face when he joins Walt Disney Co. next month. starts working as financial director – activist investor Nelson Peltz.
Johnston, who has been Pepsi’s CFO since 2010, was instrumental in fending off Trian Fund Management a decade ago when founder Peltz pushed the soft drink and snack giant to merge with a rival or split into two companies. Johnston opposed the proposal. Pepsi added a Peltz advisor to its board in 2015, and Trian sold its shares the following year.
“With Hugh on board, Pepsi did a good job of convincing the Street it had a growth plan,” said Bloomberg Intelligence analyst Ken Shea.
Peltz is now seeking several board seats at Disney after acquiring a $2.5 billion stake in the company. He dropped a similar initiative earlier this year after Disney CEO Bob Iger announced a cost-cutting plan. But Disney’s shares have lagged the S&P 500, losing about 3 percent of their value this year.
Early Monday, Disney announced the appointment of 62-year-old Johnston as its new CFO. He succeeds longtime director Christine McCarthy, who resigned in June due to family medical leave.
The new CFO is expected to have a seasoned hand on other matters at Disney. The world’s largest entertainment company is struggling to navigate consumers’ shift from traditional TV channels to streaming services. Iger, who returned to run Disney a year ago, has said he could sell networks like ABC. He is looking for a strategic partner for his ESPN sports business and plans to buy a third of Comcast Corp.’s Hulu streaming service. to buy.
Johnston, who first joined Pepsi in 1987, was considered CEO Indra Nooyi’s right-hand man before she retired in 2018. He continues to advise Pepsi’s current boss Ramon Laguarta on his efforts to grow the company, such as the $3.85 billion purchase of Rockstar Energy. drink in 2020.
Other strategic moves include an effort to address consumer concerns about healthy eating by creating smaller containers of soda and snacks, such as the company’s Doritos and Cheetos.
Under Johnston, Pepsi became known for making and beating conservative financial forecasts. The director has often been the company’s public face on Wall Street, during investor presentations and TV appearances. That could make him a possible candidate to succeed Iger, whose contract runs until 2026, according to Citigroup analyst Filippo Falorni.
“He has been with the organization,” Falorni said in an interview. “He has a lot of operational experience.”
Disney declined to comment or make Johnston available.
Johnston, member of the board of directors of Microsoft Corp. and HCA Healthcare Inc., has no direct experience with movies, TV or theme parks, Disney’s core businesses.
When Johnston joined the board of Twitter Inc. in 2016, many noted that he did not have an account on the social media site beforehand.
“Twitter Inc. may have found an answer to the problem of user growth: add non-users to the company board and let them start tweeting,” MarketWatch wrote at the time.
In a 2012 speech at his alma mater, Syracuse University, Johnston said that new challenges are the key to professional growth.
“If you continuously work on developing yourself and the skills you possess, you will stay fresh and be able to transform in any environment or market you find yourself in,” he said.
He then handed out cans of Pepsi.