By Paul Ziobro and Joann S. Lublin
Mattel Inc. on Tuesday said it named Google executive Margaret
Georgiadis as its next chief executive, hiring an outsider and a
tech-industry veteran to help the biggest U.S. toy company remain
relevant in a world of tech-savvy children.
Ms. Georgiadis, who turns 53 later this month, has been
president, Americas, at Alphabet Inc.'s Google unit since 2011,
leading the internet company's commercial operations and
advertising sales in the region. She replaces Christopher Sinclair,
who will serve as executive chairman; she is expected to join
Mattel starting Feb. 8.
The appointment of a tech operations specialist signals Mattel's
willingness to embrace a future as more than just a maker of
plastic Barbie dolls and die-cast Hot Wheels cars. During the past
two years, Mattel has experimented with adding new tech to its
lineup, including virtual reality, internet-connected dollhouses
and tablets.
Traditional toy sales have been strong in recent years, but the
industry continues to be pressed to compete with smartphone apps
and videogames for young children's attention. And with more people
shopping online, retailers are caught in a digital upheaval that
someone with a tech background can help Mattel better navigate,
analysts said.
Shares of Mattel gained 3% in early trading Tuesday. While the
company didn't disclose holiday results, Mr. Sinclair had suggested
he wouldn't hand over the reins until the company was on a firm
footing. Still, some analysts were surprised the board handed the
job to someone without toy-industry expertise.
"The complexities of operating a wholesale products business are
distinctly different than tech," Piper Jaffray analyst Stephanie
Wissink wrote in a research note. "That said, a fresh perspective
on enterprise alignment and a female voice at the helm does
reinvigorate the potential for a dramatic modernization of the
Mattel operating model."
Ms. Georgiadis stands to receive a pay package worth more than
$35 million at Mattel, including about $14 million in equity awards
to offset compensation she is leaving behind at Google, according
to a securities filing. Her compensation includes $11 million in
restricted stock and stock options that vest over three years, as
well as an equity incentive award valued at $8.3 million. Her
annual salary will be $1.5 million, and she will receive a minimum
cash bonus in 2017 of $1.5 million.
Mattel's board hired executive-search firm Spencer Stuart last
summer to identify candidates to succeed Mr. Sinclair, The Wall
Street Journal reported in November. Mr. Sinclair, who took over
the top job two years ago, has been commuting to Mattel's offices
in Southern California from his primary residence in Florida.
Mr. Sinclair, 66 years old, rose to the CEO spot abruptly in
January 2015. A longtime Mattel board member, he stepped in on an
interim basis when Mattel fired his predecessor amid slumping sales
of Barbie dolls and other big brands. Mattel named him permanent
CEO three months later, passing over internal candidates.
Mr. Sinclair and his top lieutenant, Richard Dickson, have led a
turnaround at the toy maker, which has annual sales of roughly $6
billion. Mattel has reversed sales declines at top brands such as
Barbie and Fisher-Price, patched rocky relationships with retailers
and deepened a management bench with new hires to oversee branding
strategies and development of movies and shows to help sell
toys.
The company has also overhauled its corporate culture, which now
allows designers and marketers to take more risks with a new
division called Toy Box, created as an entrepreneurial arm. "Very
little of this organization looks and acts the way it did just two
years ago," Mr. Sinclair said at an analyst meeting in November.
Ms. Georgiadis will oversee a leadership team remade with outsiders
from food, media and other industries to oversee brand development,
content creation and human resources.
Mattel passed over Mr. Dickson for the top job. Since returning
to Mattel in May 2014, Mr. Dickson has been promoted to president
and chief operating officer, overseeing marketing and sales
operations. He was seen by analysts as having an inside track to
the corner office.
Mr. Dickson and Ms. Georgiadis have some history together. She
was on the board of the apparel company Jones Group while Mr.
Dickson was in a senior position at the company. The two also
worked on Mattel's modern spin on its View-Master toy,
incorporating Google's technology from a Cardboard app to create a
basic virtual reality device that Mattel released in 2015.
Before joining Google, Ms. Georgiadis served as chief operating
officer at Groupon Inc. and chief marketing officer at Discover
Financial Services. She was a partner at McKinsey & Co. for 15
years in London and Chicago. She received an economics degree from
Harvard and an MBA from Harvard Business School.
Joanna Barsh, an acquaintance who worked with Ms. Georgiadis at
McKinsey, describes her as extremely smart and analytical. "She
doesn't put on airs," said Ms. Barsh, an emeritus McKinsey partner.
"She deals with you brain to brain."
Ms. Georgiadis, who goes by "Margo," is a director at McDonald's
Corp. and Amyris Inc., an industrial bioscience company. It is
unclear whether the new Mattel CEO will keep her two outside board
seats, however. Many boards limit chief executives to one external
corporate directorship.
Ms. Georgiadis becomes the second woman to run the big toy
maker. Jill Barad relinquished command at Mattel in early 2000
after a turbulent three years marked by a disastrous acquisition
and stream of earnings disappointments.
With Mattel's announcement, plus the recent selection of Hershey
Co. veteran Michele Buck to run the candy maker, there will be 28
women CEOs in the Fortune 500 by March.
While some Mattel brands, like Monster High, continue to
struggle, the company has largely met carefully laid out investor
expectations. Its sales have exceeded expectations in each of the
past four quarters, and it has been able to plug the hole from
losing a coveted license to make dolls based on Walt Disney Co.'s
classic princesses and characters from the movie "Frozen."
Mattel's rebound has corresponded with two of the strongest
years for the toy industry in decades. Mattel shares have rebounded
from below $20 in late 2015 but remain off highs reached in late
2013, when the stock was trading near $50 a share.
Write to Paul Ziobro at Paul.Ziobro@wsj.com and Joann S. Lublin
at joann.lublin@wsj.com
(END) Dow Jones Newswires
January 18, 2017 02:48 ET (07:48 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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