Disney CFO Rumored to Succeed Bob Iger as CEO

In the two weeks since Disney’s Bob Swap–firing Chapek and rehiring Iger, we’ve been “treated” to enough drama to fill another DisneyWar volume or two. The latest update is equal parts Succession and Game of Thrones, as there’s a new rumor about the company’s next replacement CEO after the second Iger era ends.

We aren’t going to recap everything that has transpired thus far, but here’s a quick refresher. To start, Disney Fired CEO Bob Chapek and Rehired Bob Iger as CEO a little over two weeks ago. That article recapped this saga dating back to 2020, covered why we weren’t surprised by this development, and also offered words of ‘warning’ for overly-excited Walt Disney World fans about the changes that might be on the horizon.

Following that, Disney’s Battle of the Bobs: Why Chapek Was Fired, How Iger Returned & What’s Next offered more palace intrigue about the sequence of events since this summer when Disney’s board of directors renewed Chapek’s contract. It also covered Bob Iger’s new salary, how much Chapek was paid to go away, alternate candidates Disney’s board considered, who Iger fired on day one, restructuring changes he has planned, how he’s already made a positive difference, what else Iger can do to score easy wins as he reclaims the throne, and more.

Since then, in what could be described as dereliction of duty, we’ve failed to report on some of the dramatic developments. (In my defense, I was in the parks all last week and am still playing catch-up with posts to write about Mickey’s Very Merry Christmas Party, Genie+ testing, transportation, holiday decor, and more.)

Anyway, we have an amusing update to share, courtesy of former CEO Michael Eisner’s twitter account. The day after Chapek was fired and Bob Iger was rehired, Eisner tweeted, “Welcome back to Disney, @RobertIger!” Pretty standard stuff, not particularly newsworthy. However, he opted to follow that up a week later with this little gem…

If you’re wondering whether there’s bad blood between Iger and Eisner given the ‘downfall’ of the latter, there answer is a clear no. Both men follow one another on social media, and Eisner has routinely offered words of encouragement and support to Iger over the years. This shouldn’t be tremendously surprising–Eisner was Iger’s mentor and hand-picked successor. But you never know…who would’ve foreseen the palace intrigue between Iger and his supposed protege?!

For his part, Eisner appears to harbor no ill-will towards the company, at all. Over the years, he has tweeted family vacation photos from Walt Disney World, countless positive news articles, and statements of support. To the best of my recollection, this is the first negative thing Eisner has had to say about Disney. While it doesn’t expressly cast aspersions on Chapek, that’s the most straightforward interpretation of the tweet.

On today’s episode of As the Disney World Turns, Chief Financial Officer Christine McCarthy is now rumored to have emerged internally as the leading candidate to take over the CEO position at the Walt Disney Company once Bob Iger retires (again) at the end of his 2-year contract, according to a new report in Deadline.

“Christine has always been a force to be reckoned with, but you have to put her on a list of top five possibilities after the last few weeks,” a Disney insider said of the headline-making CFO. If this rumor is accurate and McCarthy takes the helm in the next 23 months, she would occupy a historic position as the first female CEO in Disney’s 100 year existence.

As for her credentials, McCarthy was a steady hand during the previous Iger regime, helping in successfully engineering a string of key mergers. When Chapek was in charge, McCarthy adeptly raised cash during the onset of the pandemic when the business outlook was unknown and it was unclear how long the parks and other divisions would be hemorrhaging money.

That report notes that it’s rare for CFOs to take center stage; although they’re key corporate figures, they’re usually low profile managers who appear during earnings sessions and investor conferences. (If you know of McCarthy, this is precisely how–she’s a fixture on Disney earnings calls and investor seminars.)

It’s rarer still for CFOs to oust their own boss, becoming a “king killer” in the colorful words of the aforementioned article. Yet, that’s exactly what happened with McCarthy over the course of a few fateful weeks this November.

It’s been widely reported that Disney’s board of directors reached out to Iger to replace Chapek following internal complaints about Chapek’s leadership. One of the executives to express a lack of confidence in Chapek was Christine McCarthy, well-regarded chief financial officer, according to both CNBC and the New York Times, among other outlets.

McCarthy has served as the Walt Disney Company’s CFO since 2015, serving for Iger prior to his departure. As a result, she has an established relationship with the board given her longevity in the position. McCarthy telling the board that she lacked confidence in Chapek was likely instrumental in their decision to replace him. “He irretrievably lost the room,” said the leader of a Disney unit.

Deadline now attributes the “Disney coup d’état” to McCarthy, claiming that she was “distraught by the company’s dire bottom line and missteps by Chapek over the last 18 months.” Consequently, McCarthy’s name is now in the history books for going to the board and its chair Susan Arnold to orchestrate a revolt in the executive suite that brought Iger back after less than a year of official retirement.

McCarthy, one of the highest-ranking women in the entertainment industry, went to Arnold in mid-November and threatened to resign if Chapek was not cut loose immediately, per this rumor. “In the 35 years I’ve been doing this, I never saw a CFO go around a CEO,” one longtime Wall Street analyst told Deadline.

Now Iger has just under two years to pick and position a viable successor. Accordingly, it’s not totally surprising that the long-serving CFO’s name appears atop the list of five talked-about candidates for the future CEO job. That list also is rumored to include Dana Walden, Disney’s television chief, and Josh D’Amaro, Disney’s theme park chairman. Previous reporting suggests that the board doesn’t view either candidate as “quite ready” for the role.

However, the board supposedly does believe that former Disney executives Tom Staggs and Kevin Mayer are ready, as they were also considered to replace Chapek as CEO before Iger was brought back on board. In case you’re unfamiliar with the naes, these are two previous candidates to replace Iger who left Disney when it became clear they’d be passed over for CEO. In an interesting twist, the two are now running the Candle Media startup together.

Now, it would appear that McCarthy is an early leader among the top 5 early contenders to replace Iger. Analysts are supposedly fans of the chief financial officer, calling McCarthy “very honest,” “very capable” and “a straight shooter.”

“She really shined when the pandemic hit. She did exactly what the CFO should do. She lined up enough cash for one to two years of no revenue. She put together a huge bundle of cash at reasonable rates very quickly to protect the company,” said one.

On the most recent, now-infamous earnings call during which Disney’s streaming division reported $1.5 billion in losses, McCarthy did much of the explaining. “She handled all those questions,” said one analyst. Insiders describe McCarthy as “the kind of person who really has the best interests of the company at heart,” as well as “incredibly smart” and a great mentor to women at Disney.

Despite these glowing reviews, perhaps the biggest impediment to her becoming CEO is age, suggests one Wall Street analyst. McCarthy is 67 years old. “Bob Iger was originally supposed to retire about six years ago when he was 65. So I don’t see them hiring someone [that age] to be CEO” for the long term. “They just went through… how many transitions?”

In terms of my commentary, I’ll put this in blunt terms: Christine McCarthy becoming CEO would be Iger and Disney’s board making the same mistake twice. 

I know that I’ve said before that I don’t like to offer commentary about executive leadership at the Walt Disney Company because it’s tough to do so from the outside looking in since fans see what we want to see. We view things in reductionist terms, and can be manipulated by agendas both internal and external to the company. (To wit, this Deadline piece was probably placed by someone close to McCarthy who wants to raise her profile. That would also explain previous pieces from the NYT and CNBC that were heavy on specifics about McCarthy orchestrating the Chapek ouster.)

Consequently, it’s easy to paint leadership in the familiar terms of Disney fairytales. There’s always a villain who gets the brunt of the blame, and an underdog hero who “gets” Disney and could save the company if only they had more power.

In that familiar story structure, Christine McCarthy has emerged as a villain over the course of the last few years. Her name might not be as recognizable as Bob Chapek’s to the more casual readers out there, but you’re undoubtedly familiar with her “material.”

McCarthy is a fixture of corporate earnings calls and she routinely speaks at conferences by Wall Street firms. You’ve likely heard her ‘greatest hit,’ a controversial quip regarding the impact of inflation on food costs: “We can adjust suppliers. We can substitute products. We can cut portion sizes, which is probably good for some people’s waistlines.”

This is definitely McCarthy’s most infamous remark and, in fairness, one ill-advised attempt at humor shouldn’t be held against her. We all say things we come to regret, and this might’ve been a regrettable remark to make on a corporate earnings call, I do think the reaction to it has been overblown. (This is despite continually referencing it–I appreciate the irony.)

McCarthy has also made controversial comments about Genie+ and time v. money that weren’t well-received on social media. She has bungled the names of attractions and expansions from time to time, resulting in more fan ridicule. (There’s actually a bit of irony in her being dubbed a ‘bully’ or whatever when the same fans seize on any misstatement.) If you ask me, most of this is much ado about nothing. The CFO has a specific job, and doesn’t necessarily need to know official attraction names, slogans, and so forth. If you quizzed me about the nonsensical naming convention of the Little Mermaid dark rides on each coast, I’m probably going to fail that test, too.

From my perspective, it’s less about the substance of these specific statements and more about her way of speaking. I’d be slightly worried about writing this and being perceived as taking a regrettable detour down casual sexism lane, but fortunately, I just wrote Bob Chapek Did Not “Get” Disney.

Current Disney CFO and apparent future CEO candidate Christine McCarthy appears to have the exact same shortcomings of Disney’s past male CEO Bob Chapek. This opinion is not based on the high profile gaffes–it’s based on the totality of what she has said on the dozens of corporate earnings calls and investor conferences that I’ve listened to or watched. It’s not necessarily that she doesn’t “get” the magic of Disney–it’s that I do not believe she can communicate that she “gets” the magic of Disney. (Perhaps both, but definitely the latter.)

It might seem unfair that McCarthy is “punished” for Chapek’s woes, but I’d argue that turnabout is fair play. McCarthy was instrumental in pushing Chapek out, and for that, we fans owe her a debt of gratitude. (I’d propose forgiving her past “sins” of the waistline and other comments.)

However, they are two sides of the same coin. Based on everything we’ve seen and heard from McCarthy, there’s little reason to believe she is capable of being the charismatic leader that the Walt Disney Company, an inherently creative enterprise with a visionary founder, needs.

Once again, the Walt Disney Company is not just any Fortune 500 multinational corporation. Disney is held to higher and different standards, which is both by Disney’s own design and the company’s rich history and legacy. Walt Disney is an American icon and visionary, treated with reverence by fans who still debate how Walt would feel about even mostly-inconsequential changes to the parks decades after his death.

I’ve previously shared that my favorite Walt Disney quote is: “You can design, create, and build the most wonderful place in the world. But it takes people to make the dream a reality.” Bob Iger is no Walt Disney, but Iger cares about the people, creative vision, and legacy of the company that Walt created. Disney needs someone at the helm who gets what makes Disney…Disney. Equally as important, the company needs someone who can communicate that they understand the magic of Disney, as that’s needed to earn the trust and loyalty of Cast Members and fans.

I’m not going to rehash that article about Chapek not “getting” Disney, but the bottom line is you could replace most instances of “Chapek” with “McCarthy” and it would mostly be accurate and make sense.

She speaks on corporate earnings calls in the same manner, and appears to view the company in cold and objective financial terms, and makes decisions accordingly. If she does have sentimentality towards the “product” and its “consumers,” she does not make that clear. Instead, it appears she views Disney not through a creative lens, but through the terms of the balance sheet.

None of this is to say that Christine McCarthy is bad at her job, deserves to be fired, or anything of that sort. By all (reasonable) accounts, McCarthy is an exceptional CFO. She has been with the company a long time, was instrumental in key acquisitions under the Iger regime, and then with securing sufficient cash reserves in the early days of the pandemic.

While fans may not like a lot of the decisions, but that’s the nature of the role. I cannot imagine most fans having a favorable opinion of Disney’s CFO no matter who it were, as the position is inherently at-odds with fan desires. Nevertheless, McCarthy has helped achieve enviable financial results in the last two years. Her tenure as CFO is undoubtedly looked upon favorably by Wall Street investors and analysts.

However, being really good at one thing doesn’t necessarily translate to being good at another very different thing. For reasons beyond me, America has this misplaced notion that celebrities make good politicians and entrepreneurs can successfully run any type of business. Call me old-fashioned, but I wouldn’t hire a neurosurgeon repair my car. Bob Iger has a lot of charisma, but I don’t think that makes him qualified to be a plumber or president.

I also think this is the type of mistake that the Walt Disney Company constantly makes. Since the Eisner era, Disney has routinely shuffled around executives, moving them from one domain with the philosophy that talent is portable. In some ways, it can be–in many others, it is not. This is true for Bob Chapek, too. By all accounts, he was great with media distribution and consumer products. It wasn’t until he moved over to theme parks–and then quickly ascended to CEO–that his shortcomings became apparent.

Ultimately, it seems like a similar situation here. It’s probably safe to assume that Christine McCarthy is an excellent CFO. She likely would make an excellent Roy to someone’s Walt, or (more aptly) Frank Wells to someone else’s Michael Eisner. If Disney were to reorganize and split power at the top between the CEO and COO or president, McCarthy might make a ton of sense as the second in command.

There’s also the possibility that she simply hasn’t been given the chance to shine in a role outside the highly-analytical CFO position, and she could show her strengths and round-out her skill-set with a move to a different c-suite position in the Walt Disney Company for the next couple of years. However, we’ve already seen that movie once, and it didn’t end well–it’s hard to get behind the idea of another Chapek in the top spot after seeing how badly that just went.

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YOUR THOUGHTS

From the outside looking in, do you believe Christine McCarthy would make a good CEO of the Walt Disney Company? Think she “gets” the Magic of Disney? Would you prefer McCarthy, D’Amaro, Staggs, Mayer, or someone else as the next CEO after Iger retires again? Thoughts on anything else discussed here? Are you optimistic about the company’s future as the Walt Disney Company enters its 100th year? Think things will get better in 2023? Do you agree or disagree with our assessment? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!