Peloton Interactive Inc., accused by an activist investor of being unwilling to work with regulators, has turned to a veteran GE Appliances executive to be its new vice president of product safety compliance.
Michael Del Negro, who spent more than 11 years with GE Appliances and its former parent company, General Electric Co., joined Peloton this month as the home fitness company grapples with legal and regulatory challenges while it works to shed costs and improve profitability.
Del Negro is a former senior counsel for product safety and regulatory compliance at GE. He took over the top compliance job at GE Appliances in 2016 when China’s Haier Group Corp. paid $5.4 billion to buy the business from the conglomerate.
Peloton received a letter from activist investor Blackwells Capital LLC demanding the company sell itself or fire its chief executive officer, John Foley, Bloomberg News reported Monday. Among Blackwell’s allegations is that Peloton has been “reluctant to work with the Consumer Product Safety Commission.”
Del Negro, during his time at General Electric, met with commission officials and worked on voluntary product recalls and other safety-related issues with the panel. Peloton has retained Washington-based boutique Keller and Heckman to advise it before the commission.
The company said last week it would halt production of its connected fitness products, and last year it recalled treadmills recalled treadmills following the death of a child and more than 70 safety incident reports.
Del Negro didn’t respond to a request for comment about his new role, which he confirmed in a statement posted to his LinkedIn profile.
“I’m saying farewell to a stellar team and increasingly successful company in a hypercompetitive industry,” he wrote.
Peloton didn’t respond to a request for comment about Del Negro’s hire, nor did the company’s co-founder and chief legal and culture officer Hisao Kushi. Peloton hired its head of compliance last year in Lance Lanciault III, who previously worked at General Electric, eBay Inc., StubHub Inc., and Walmart Inc.
Wendy Treinen, a spokeswoman for GE Appliances, said that the company’s vice president of legal and general counsel Jason Brown has taken over Del Negro’s former compliance chief duties.
Peloton’s shares have plummeted more than 80% from their peak a year ago as pandemic-related restrictions have eased. CNBC first reported last week that several Peloton executives and insiders sold off nearly $500 million worth of company stock last year before shares began their decline.
Kushi, Peloton’s legal chief since 2015, unloaded roughly $92.6 million in shares, according to securities filings. Bloomberg data shows that Kushi currently owns nearly $42,000 in Peloton stock.
The company disclosed in its most recent proxy statement filed in October that Kushi received nearly $8.8 million in total compensation during fiscal 2021, with almost $7.9 million of that sum in the form of option awards.
His daughter, Kate Kushi, also works for Peloton as an assistant brand manager of marketing, drawing an annual salary of $82,400, per the company’s proxy.
Besides Kushi, other attorneys who are part of Peloton’s senior leadership team include deputy general counsel Caitlin Johnston, who manages the company’s U.S. legal team, and senior vice president of music Gwen Bethel Riley, a former head of music business affairs at the Walt Disney Co.
Latham & Watkins, which is representing Peloton in false advertising and intellectual property disputes, has handled roughly 20% of the company’s U.S. federal litigation caseload over the last five years, according to Bloomberg Law data. Latham also counseled the underwriters on Peloton’s $1.2 billion initial public offering in 2019.