A new CFO will lead finance at the world’s largest entertainment company and the stakes are high. 

The Walt Disney Company (No. 48 on the Fortune 500) announced on Monday that Hugh F. Johnston has been named senior executive vice president and CFO, effective Dec. 4. Johnston is currently the vice chairman and CFO of PepsiCo, where he has held numerous leadership positions during a 34-year career with the food and beverage giant.

“It was a bit of a surprise to me, and I think it was a bit of a surprise to the Street,” says Gerald Pascarelli, a Wedbush Equity Research senior VP. “But these things happen. It’s just one of the realities of the business, and Pepsi is going to be well-positioned to handle the transition.”

In June, longtime Walt Disney CFO Christine McCarthy took a family medical leave of absence and stepped down from her position. McCarthy joined Disney in 2000 and was elevated to CFO in 2015. Kevin Lansberry took on the role of interim CFO on July 1. Now with Johnston’s appointment, Lansberry will return to his role as CFO of the Disney Experiences segment. 

McCarthy helped complete the company’s $71 billion acquisition of Fox’s entertainment assets as well as navigate the pandemic that shut down much of Disney’s business globally. She pushed internally for Bob Iger to return to the CEO role in November 2022, replacing his hand-picked successor, Bob Chapek.

‘He’s someone who knows how to unlock efficiencies’

Iger referred to Johnston in a statement as “one of the best CFOs in America.” Iger said, “His expertise will serve Disney and its shareholders well as we continue the transformative work we are doing to drive growth and value creation.” 

Johnston will receive a base salary of $2 million and a bonus. He’s also receiving a stock award of $14 million and a $3 million one-time signing bonus.

He began as CFO of PepsiCo in 2010, but first joined the company in 1987. Johnston held a variety of roles, including president at Pepsi-Cola North America, and CFO at PepsiCo Beverages and Foods.

“What he brought to Pepsi, which is what I think he could bring anywhere, is just adding value, and he’s someone who knows how to unlock efficiencies,” Pascarelli tells me. 

“Pepsi has delivered earnings in line with what the street was anticipating or had exceeded expectations for 55 consecutive quarters—entirely over the duration that [Johnston] was CFO,” he says. “With Hugh, you’re gonna get somebody that knows how to deliver high-quality earnings, which is really where he made his mark.”

Disney’s challenges this year have included two Hollywood strikes, declining streaming revenue, and an activist investor in its midst. Nelson Peltz, a billionaire, activist investor, CEO, and founding partner of private equity firm Trian Fund Management, now wants to wield influence on Disney’s board of directors by gaining multiple seats at the table after acquiring a $2.5 billion stake in the company. 

In January, Peltz launched a proxy fight and announced that he would seek a board seat at Disney to try to initiate changes. But he had a change of mind on Feb. 9 after Iger announced plans for a dramatic restructuring during the company’s earnings call on Feb. 8.

Pascarelli notes that Peltz was an activist investor pushing for change during Johnston’s tenure at PepsiCo, and his experience could help Disney.  

For several years, Trian’s Peltz and PepsiCo’s management, then led by CEO Indra Nooyi, engaged in a public battle over how the company should be managed. Peltz campaigned for PepsiCo to undo its merger between Pepsi and Frito-Lay. PepsiCo management opposed the strategy, fended off a potential proxy war, and managed to persevere in early 2015.

Disney will report earnings for the most recent quarter on Nov. 8. And that’s when we’ll know the complete scope of what Johnston will have on his plate when stepping into the CFO role. 

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

James (Jamie) Caulfield was promoted to EVP and CFO at PepsiCo, Inc. (Nasdaq: PEP). Caulfield succeeds Hugh Johnston who will retire from the company on Nov. 30, and will join The Walt Disney Company as CFO. Caulfield has been SVP and CFO at PepsiCo Foods North America since 2019. He has been at PepsiCo for more than 30 years in several financial leadership roles.

David Y. Park was promoted to CFO at StepStone Group Inc. (Nasdaq: STEP), a global private markets investment firm, effective Jan. 1. Park will be succeeding Johnny Randel, who has served as CFO since 2010, and is retiring. Park is currently chief accounting officer at StepStone. He joined the company in 2019 with 25 years of experience in public accounting and senior-level roles in both public and private companies.

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