Peloton shakeup leaves board largely intact

Yahoo Finance's Julie Hyman and Brian Sozzi discuss Peloton naming former Spotify CFO Barry McCarthy as the new CEO of the fitness company.

Video Transcript

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JULIE HYMAN: Peloton has a new CEO in Barry McCarthy, but as the activist investor that's targeted the company mentioned yesterday, the board is perhaps still full of insiders. And does that mean anything's going to change? Brian Sozzi, you're looking at that board composition here. What does it tell you?

BRIAN SOZZI: Yeah, Julie, it certainly seems still too cushy for me, and perhaps it should be seen as cushy for those folks in the Street. And there are many calling for a sale of Peloton here because just given how cushy this board looks and considering John Foley, the now ousted CEO of Peloton, still has a super majority voting position in Peloton, it's hard to see a deal happening overnight.

But again, you're looking at this board. Foley just essentially lost his job as CEO. He's moving on to the board as executive chairman. You have William Lynch, who was the president of Peloton, he is now-- he was already a board member. He is staying on the board. New CEO, Barry McCarthy, he will join the board. And Foley essentially picked two new members himself to join the Peloton board. That's Angel Mendez and Jonathan Mildenhall.

Now one person that is, in fact, leaving, that is Eric Blackford, a longtime Foley associate or friends, however you want to pull it, I believe dating back to their time or his time at IAC and Expedia. But by and large, you look at a lot of the other connections on the board, as I have done on a piece now on Yahoo Finance. The board is pretty much staying intact. And they all, by and large, I would say outside of McCarthy, remain loyal to Foley.

Now there is a letter swirling around this morning that McCarthy wrote to employees. Peloton spokespeople declined to send it to me. But again, that letter suggesting-- and it was written by McCarthy-- that Foley is going to remain very actively involved in this company. So you really have to wonder how much is going to change at Peloton, and then to what extent it will change.

JULIE HYMAN: Well, yeah, that's the big question here. So they did those job cuts, right? They're going to retrench on manufacturing, the overcapacity that's been happening. And like, what else, right? I think that's really going to be the big question.

BRIAN SOZZI: Yeah, you still-- it was very interesting, Julie, to see that Foley is taking the executive chairman role, not the chairman role. Chairman role, when you hear that, usually, you think of someone just trying to pull back on what they do from day-to-day, collect a check, maybe go play some golf, go swimming, go on a Peloton Bike, whatever it is.

But executive chairman, in many respects, it is-- it's not too far removed from being the CEO of a company. So I would expect Foley to remain very involved. He's still on the board. It's a situation I think it's just getting started, Julie. I think there's going to be a lot more changes at Peloton.

JULIE HYMAN: So we will continue to watch that situation.