Disney’s CFO, who raises concerns about Bob Chapek, is respected on the street

“She is respected and appreciated by the board, so she has charisma. She has weight, influence and history with the board,” said Jonathan Kees, senior research analyst at a subsidiary of Daiwa Securities Group Inc., a Japanese investment bank. .

Armed with a bachelor’s degree in biology from Smith College and an MBA in marketing and finance from UCLA’s Anderson School of Management, Ms. McCarthy joined Disney in 2000 later in banking, including the position of CFO of Imperial Bancorp.

She was hired as Disney treasurer and took on additional responsibilities over the years, becoming executive vice president overseeing real estate and operations along with her duties as treasurer in 2005. In 2008, she also undertook corporate acquisitions, alliances and partnerships, and in 2015—after 15 years as treasurer—Jay Rasulo succeeded as finance directorthe first woman to take on that role at Disney.

McCarthy’s promotion to CFO comes after Mr. Rasulo and his predecessor, former CFO Tom Staggs, competed over who should succeed Robert Iger as CEO. Both in the end step down From the company.

Her first steps as CFO were not easy. During her first earnings call as chief financial officer in August 2015, with Mr. Iger, Ms. McCarthy offered a cut on the company’s outlook for the cable business, pointing to the cut the rope.

“In many ways, that has cascaded into investor sentiment towards Disney and the media sector,” said Kutgun Maral, media analyst at RBC Capital Markets, a financial services firm. more widely in the years to come.

Those who knew her when she was treasurer and overseer of Disney’s real estate portfolio praised her knowledge and expertise. An executive who considered buying one of Disney’s properties in New York and toured the site with Ms. McCarthy described her knowledge as impressive.

She supports other female executives and mentors young financial talent, analysts say, and she sits on several boards, including

Procter & Gambling copper

Under Ms. McCarthy, Disney has surpassed analyst expectations for reported earnings per share in 17 of 30 quarters and has completed a series of acquisitions, including major ones. entertainment property by 21st Century Fox in 2019. According to those who have worked with her, she is considered a calm person and knows what is right and wrong.

During the pandemic, when nearly half of the company’s revenue has temporarily disappeared due to the closure of theme parks and cinemas and the shutdown of cruise lines, Ms. McCarthy has remained in close contact with ratings firms and investors on Wall Street, according to Neil Begley, a senior vice president at ratings firm Moody’s Investors Service. Disney received about $23 billion in emergency liquidity, halted stock buybacks, halted dividends and furloughed thousands of workers.

“She was listened to by Wall Street,” said Peter Supino, media analyst at research firm Wolfe Research LLC.

More than two and a half years since the start of the pandemic, Disney’s dividend is still unadjusted. The company has $11.61 billion in cash and cash equivalents on its balance sheet, with several billion in debt maturing in the coming years.

Ms. McCarthy, known to investors for her reliable forecasts, recently had to report some earnings errors. Two of the past six quarters, the company’s revenue fell short of analysts’ consensus estimates, leading to questions about streaming strategy.

One of the questions the company faces is whether to scale back some of the goals the management team set in August. Based on that, Disney+ by the end of fiscal 2024 will have between 135 million and 165 million users in its core business and up to 80 million users in its Hotstar business, which operates in India and other emerging markets. The streaming business, launched in 2019, will be profitable in fiscal year 2024.

Disney in November lowered expectations for Hotstar in the first quarter of fiscal 2023 but said its core subscriber growth would largely be in line with previous guidance. Analysts call it a missed opportunity to adjust market expectations at a time when sentiment is shifting.

With earnings nearing October 1, Disney’s management team didn’t prepare the market for what was to come—approximately $1.5 billion in damage in the streaming division, analysts said.

RBC’s Mr Maral said: “They seem a bit deaf to the losses, but that’s not coming from Christine.

She is part of a group of executives who, in the words of returning CEO Mr. Iger, are now working to bring more decision-making power to the company’s creative and collaborative teams. rationalizing costs, after dismantling a centralized unit that had been established under Chapek, according to a memo sent to employees by Mr. Iger.

After the leadership reshuffle, Disney faces the challenge of regaining trust from the streets, and Ms McCarthy needs to reconnect with her old and new chief executive, Mr. Iger, analysts say.

At 67, McCarthy will likely stay on while Iger reviews Disney’s strategy and looks for another successor for himself, analysts said. Her contract runs until June 2024, according to a filing with securities regulators.

Write to Nina Trentmann at [email protected] and Mark Maurer at [email protected]