Walt Disney on Monday hired PepsiCo veteran Hugh Johnston as its chief financial officer, strengthening top boss Bob Iger’s hands as he tries to turn around the media giant facing a decline in its cable business and investor pressure.
The conglomerate is in the middle of a restructuring that aims to make its streaming business profitable and chart a path for its traditional TV unit, including possible asset sales and a tie-up for its sprawling sports network ESPN.
With Johnston, 61, it gets an executive with solid top level experience and who has been credited with boosting PepsiCo’s revenue to about $86 billion last year from $58 billion in 2010.
Johnston had also helped guide the Doritos maker through its bitter battle with activist investor Nelson Peltz’s Trian Fund Management.
Trian is reportedly planning a new board challenge at Disney, months after the company addressed the hedge fund’s criticism by outlining a plan to reduce more than $5 billion in costs that included 7,000 job cuts.
“(Johnston’s appointment) is a solid positive for Disney, which needs the financial help,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisor.
Johnston – who sits on the boards of Microsoft and HCA Healthcare – will join Disney on Dec. 4, filling a position vacant since Christine McCarthy stepped down in June.
Disney’s shares were flat Monday. They are slightly lower for the year and have underperformed the benchmark S&P 500 index for the past two years.
Some of the weakness this year has come due to the strike by Hollywood actors, which has paused much of the TV and movie production and is expected to weigh on the company’s outlook for box-office revenue when it reports earnings on Wednesday.
At PepsiCo, Johnston will be replaced by Jamie Caulfield, currently CFO at the company’s North America business.
Johnston will receive an annual base salary of $2 million, Disney said, compared with the $1 million base salary he received at PepsiCo at of the end of 2022, according to a regulatory filing.
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