Mattel Inc (MAT.O), the largest U.S. toymaker, said on Tuesday that Google Inc's Americas president, Margaret Georgiadis, will become its chief executive, replacing Christopher Sinclair.
Georgiadis, whose appointment is effective Feb. 8, has also served as chief operating officer of daily deals website operator Groupon Inc (GRPN.O) and chief marketing officer of Discover Financial Services (DFS.N).
Sinclair, who will remain chairman, took over in April 2015 after the company abruptly removed Bryan Stockton amid falling sales. Sinclair was 64 when he took charge.
Under Sinclair, Mattel's efforts to revive its flagship Barbie gained traction, driven by a change in marketing strategy and the launch of dolls in a variety of skin tones, hairstyles and outfits and in three new body shapes.
|© REUTERS/Mario Anzuoni. The logo of Mattel is seen outside the company's corporate headquarters in El Segundo|
Mattel Names Google Executive Margaret Georgiadis as CEO
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.
Mattel Inc. Names Margaret Georgiadis CEO - Quick Facts
Mattel Inc. ( MAT ) announced that Margaret Georgiadis has been named as CEO, effective February 8, 2017. Ms. Georgiadis, who will also join Mattel's Board, was most recently President, Americas at Google Inc. She will succeed Christopher Sinclair as CEO. Going forward, Sinclair will serve as Executive Chairman of the Board. Richard Dickson will continue as President and Chief Operating Officer.
As President, Americas at Google from 2011-2017, Ms. Georgiadis led the company's commercial operations and advertising sales in the US, Canada, and Latin America. Her prior roles at Google include leading Global Sales Operations and expanding local and commerce businesses. Ms. Georgiadis has served as COO of Groupon, Inc., and Executive Vice President of Card Products and Chief Marketing Officer of Discover Financial Services. Prior to Discover, Ms. Georgiadis was a partner at McKinsey & Company for 15 years in London and Chicago.