Mickey’s New Bean Counter

Hugh Johnston, a veteran executive with a 34-year career at PepsiCo, has joined The Walt Disney Company as its new chief financial officer. His appointment comes at a sensitive time for the world’s largest entertainment corporation; Disney has reported earnings declines for the past four quarters, and its share price has lost half its value since reaching a peak two years ago. Above all, critics say, Disney has lost its magic.

Johnston’s primary task will be helping CEO Bob Iger, who was brought back last year to stabilize the company after a uniquely successful run lasted from 2005 to 2020, to execute its reorganization and cost-cutting plan.

“The company is clearly facing some major challenges right now in how it is managing its assets, especially regarding its investments in television and streaming,” says Peter Kunze, professor in the Department of Communication at Tulane University and author of Staging a Comeback: Broadway, Hollywood, and the Disney Renaissance. “For some time now, sales of ABC, ESPN, FX, and even the Disney Channel, have fueled gossip. Further, the merger of Hulu and Disney+ reveals the attempt to get streaming under control at a time when few streamers beyond Netflix seem to understand how to navigate the business.”

Additionally, Disney’s blockbuster film franchises are struggling with quality control issues and audience burnout and theme-park attendance has yet to recover from the pandemic. Attacks for “wokeness,” led by Florida governor and US presidential candidate Ron DeSantis, have added another distraction for Disney on the public relations and legal sides, Kunze notes.

Last but not least comes activist investor Nelson Peltz, who has acquired a $2.5 billion stake in Disney and now is seeking to secure multiple seats on the board of directors. With this problem, however, Johnston, a rare outsider in Disney’s corporate universe, is not altogether unfamiliar. During his tenure at PepsiCo, where Johnston held the positions of vice chairman and CFO for the last 13 years, the multinational food and beverage company was able to fend off a similar attack from Peltz. Johnston’s base salary, a Securities and Exchange Commission filing shows, is set at $2 million, plus a potentially lucrative performance-based bonus. The hopes are high for him to earn every cent of it.