If “Barbie” is awarded best picture at next month’s Academy Awards, it would only crown what has been an unprecedented moment for the world’s No. 1 selling doll.

The glossier half of the “Barbenheimer” sensation not only brought in nearly $1.5 billion at the global box office, but also renewed the cachet of a toy old enough to be Medicare eligible next month — earning Mattel some $150 million, including doll sales and other revenue streams last year.

It all seemed to validate the toy maker’s strategy of turning its legacy brands into modern media properties, with more than a dozen other live-action films coming up.

“Our job is to take brands that are timeless and make them timely,” is how Mattel Chairman and Chief Executive Ynon Kreiz put it in an interview.

Yet the El Segundo company is not feeling much affection from investors. (Nope, Mattel is not based in the film’s imposing Century City high-rise.) After surging during the pandemic, the company’s stock performance has been middling, despite a surge after “Barbie” was released and the recent stock market rally.

This has caught the attention of an activist investor, which is pressuring Mattel to change course and better reward its shareholders.

The New York hedge fund Barington Capital Group isn’t calling for Barbie to be put on the auction block, but the same can’t be said for two of its other top brands: Its line of premium-priced American Girl dolls and its iconic Fisher-Price line of baby, toddler and preschool toys.

Barington, which kicked off its campaign with a Feb. 1 letter to Kreiz, is also taking aim at Mattel’s executive compensation and governance structure, while calling for $2 billion in stock buybacks to provide a better return for investors. It hasn’t disclosed its stake in the company.

“We want to enhance value for all of the shareholders and owners of the company, including the management team,” said James Mitarotonda, chairman of Barington. “The company needs to either fix the businesses or sell them.”

Barington calculated that Mattel’s stock fell 13.2% in the two years preceding its letter, underperforming the Standard & Poor’s 500 index by more than 20%. Shares of Mattel have risen about 7% during February’s stock rally, closing at $19.61 on Tuesday. The stock hit a high of $26.97 during Kreiz’s tenure in May 2022.

The hedge fund doesn’t have as high a profile as some other shareholder activists, such as Carl Icahn or Nelson Peltz, who is currently battling Disney. Barington, though, has waged roughly 100 campaigns, Mitarotonda said, including convincing L Brands, which is now Bath & Body Works, to spin off Victoria’s Secret as a separate company.

In response to the campaign, Mattel said it was looking “forward to engaging with Barington as we do with all our shareholders. We welcome this initial outreach and we are reviewing their letter.” Mitarotonda said Barington has since had “positive” discussions with Kriez but declined to discuss them in detail.

Given the unprecedented success of “Barbie,” Mattel seems an unlikely target for an activist investor.

Despite past turmoil in the toy industry and stiff competition from digital games, the company has experienced a comeback since Kreiz took over in 2018 — a year when the company posted a $1-billion loss. Barington acknowledged that, pointing to the company’s higher margins, lower debt leverage and $700 million growth in annual revenue by the third quarter of last year.

“We recognize the meaningful improvements that you and your team have delivered over the last six years,” the letter stated.

However, the big growth in net sales was achieved in 2021 when parents were still saying home en masse with their kids. Since then, annual net sales have flatlined at $5.4 billion while annual net income declined about 75% over the three years to $214 million last year, according to FactSet. For the fourth quarter, the company reported a 16% increase in net sales, with sales flat for all of 2023.

Mattel wasn’t the only company hit by the toy industry’s soft 2023, which saw a 7% sales decline in 12 global markets, according to Circana. The consumer data analyst cited inflation and the continuing challenge of lower birth rates as issues. Mattel rival Hasbro, the maker of Transformers and G.I. Joe, reported a fourth-quarter decline in revenue and higher losses, sending shares skidding.

An Israeli native and UCLA business school graduate, Kreiz, 58, previously led YouTube content producer Maker Studios, which Disney acquired in 2014. He also had worked for Haim Saban, who made billions of dollars on the Power Rangers franchise. Kreiz was Mattel’s chairman when he was named chief executive, becoming the fourth person to hold the CEO title since 2012.

From the start, Kreiz’s goal was to supercharge Mattel’s lagging efforts to become a higher-valued entertainment company. That meant reviving efforts to get Barbie a starring role. The broader strategy includes television, digital games, publishing and consumer products. Mattel also is opening a small theme park in suburban Phoenix.

“Barbie” succeeded beyond Mattel’s wildest expectations after Kreiz gave unusual creative control to director Greta Gerwig. (That choice paid off at the box office, but it didn’t do Kreiz any favors considering the film’s less-than-flattering portrayal of Mattel’s corporate chief by comedian Will Ferrell).

The company’s slate of films includes an upcoming Barney motion picture produced by Academy Award winning actor Daniel Kaluuya, a Hot Wheels movie by blockbuster producer J.J. Abrams and a Rock ‘Em Sock ‘Em Robots movie starring Vin Diesel.

It appears to be a formula for continued success, though analyst Jim Chartier of Monness Crespi Hardt & Co. said it’s important to remember the truism: There’s no guarantees in Hollywood. He noted how Mattel rival Hasbro had a hit with its 2007 “Transformers” film but couldn’t duplicate that with some other properties.

“Mattel’s got big people behind these other movies but you can’t assume these properties are going to be blockbusters,” said Chartier, who has a “buy” rating on Mattel and a $26 price target.

Still, no one is doubting the long-established toy industry strategy of courting Hollywood — the issue Barington has is with the other two big brands.

Mattel’s infant, toddler and preschool segment, which includes Fisher-Price, has experienced a more than 40% decline in annual revenue since 2015 through the third quarter of last year, even as global revenue for such toys grew, according to Barington’s letter. Similarly, it said, American Girl’s annual revenue fell 61% since 2016, even as global doll revenue grew.

Barington calculated that without those sales declines, Mattel would have nearly doubled its four-year revenue growth rate. The investor suggested selling the businesses. “Mattel may not be the right owner of these brands,” its letter stated.

Mattel acquired Fisher-Price in 1993 and, according to the company, it remains the bestselling infant and preschool brand in the world. Even before Barington’s letter, Mattel announced a shake-up at Fisher-Price, telling employees in January that the toy line’s general manager and global head of infant and preschool, Chuck Scothon, would be leaving after six years at the helm.

The American Girl line of premium large dolls, which feature multiple collections, generally are priced at more than $100. The dolls are sold online and at major retailers, while Mattel operates retail boutiques, including in Los Angeles, where kids can hold parties, receive salon services and share tea time with their dolls.

Analyst Linda Bolton Weiser of D.A. Davidson said she thinks it’s more likely that Mattel would sell American Girl than Fisher-Price, since the doll line suffers from lower-priced competition.

(Target, for example, sells an exclusive line of rival dolls called Our Generation that can cost a quarter of the price.)

Mattel shows no signs of abandoning the doll line it acquired in 1998. It is developing a film with Paramount for the big screen, and during comments Kreiz made in response to Barington’s letter on the Feb. 7 earnings call, he said Mattel is “very confident in the long-term value of American Girl.”

Mattel’s earnings announcement also stated that its board had approved a $1-billion share repurchase after buying back $203 million worth of shares in 2023. And the company announced two new directors with experience in media, tech and finance. Kreiz cautioned against reading into those developments. “These are things that we take our time to consider and analyze,” he said during the earnings call.

Mitarotonda called the $1-billion share buyback a “good start” and said he was “looking forward to more” in the future.

Barrington also has taken issue with Mattel over alleged excessive stock-based compensation to the management team. It said in its letter that Kreiz received $29.8 million in such compensation from 2020 through 2022, which was 44% higher than the median aggregate of what his peer chief executives received during that period.

Kreiz’s total compensation in 2022 was $11.9 million, including a base pay of $1.5 million, stock awards of $7.69 million and stock options of $2.56 million, according to a regulatory filing.

Weiser said that Kreiz has done an “excellent job” in a difficult industry. “He brought the company back from the brink of bankruptcy,” she said.

The criticism of Kreiz’s compensation was based on a peer group developed by the company to set its own compensation, Mitarotonda said, adding the fund’s letter didn’t note how the group appears stacked with higher-revenue companies, minimizing how excessive the stock awards actually were. Hershey, Live Nation and Campbell Soup are among the members.

In regards to governance, Barington wants Kreiz to step down from his board chairmanship. Splitting the role from his chief executive duties are a fundamental principle of good corporate governance, Mitarotonda said, likening it to the checks and balances system enshrined in the U.S. Constitution.

“Does good governance create value in and of itself? No, it does not. But it does set the right culture in order for you to have a good management team that does deliver the right results,” he said.

Mattel is forecasting flat sales but profit growth this year as it continues to cut costs. Global toy sales are expected again to be soft, though not as poor as 2023.

The company plans an investor day March 7 when it is expected to roll out new products. During the earnings call, Kreiz said that this year it will expand Fisher-Price’s core product lines and introduce an “exciting new segment.”

Mitarotonda said he is eager to hear any company initiatives regarding Fisher-Price and American Girl.

“Part of what we wanted to make sure is that they have a compelling plan to improve these businesses,” he said.