Christine McCarthy’s abrupt departure from her post as Disney’s chief financial officer was attributed to a family medical leave, but insiders say there’s more to her exit than her husband’s poor health, The Wall Street Journal reported Friday.
While McCarthy’s husband has been in a healthcare facility since early this year, a person familiar with her situation told the Journal there have been no dramatic changes recently that would drive her to step down. But there were signs of strife coming from the CFO’s office before the House of Mouse announced Thursday that she’d be leaving that were perhaps buried in the glowing comments that accompanied the announcement of her depature.
“Christine McCarthy is one of the most admired financial executives in America, and her impact on The Walt Disney Company during 23 years of dedicated service cannot be overstated,” CEO Bob Iger said in a statement Thursday.
Yet the Journal reported that McCarthy has butted heads with Iger since he returned as CEO in November and other top execs over the media and entertainment giant’s restructuring strategy. In February, the company created three new business segments: Disney Entertainment, which includes movie, television and streaming operations; ESPN and Disney Parks. It includes axing 7,000 jobs, with the goal of reducing costs by roughly $5.5 billion.
The retooling came amid a proxy battle led by activist investor Nelson Peltz, who owns about 9.4 million shares of Disney and was aiming to force spending cuts.
But while the cuts represent eliminating about 3% of Disney’s workforce, McCarthy felt the restructuring “didn’t go far enough to streamline the company,” The Journal reported, citing a person familiar with the situation.
She pushed for more tightening in the Disney Entertainment unit “to improve profit margins and give Disney a leaner structure more akin to Netflix, putting her at odds with the unit’s leadership,” the Journal reported, citing the same unnamed source.
Wall Street appears to agree. Disney shares were trading Friday around $92, down about 17% since the reorganization was announced, while the S&P 500 Index has seen a gain of about 7% in the same period.
Disney could not immediately be reached for comment.
McCarthy played a major role in the sudden departure of Former CEO Bob Chapek late last year, The Journal said, after she informed Disney’s board that she had lost confidence in his leadership amid floundering financial results and a falling stock price. The report also credited her hand as influential in the earlier jettison of Peter Rice, Disney’s TV chief, under Chapek.
