So-called boomerang CEOs can be like Steve Jobs, who propelled Apple to new heights. Or they can fail to recapture the magic.
There’s something to be said about a known quantity, particularly when it comes to chief executives.
It worked for Apple, when the then-floundering computer company turned to its ousted co-founder Steve Jobs. Jobs reshaped the company and built it into a tech titan.
It worked for Starbucks, when the coffee chain brought back Howard Schultz and sales increased.
But will the strategy of a so-called boomerang CEO work for Walt Disney Co.? On Sunday, the company’s board announced that former Chief Executive Bob Iger will be returning to lead the company for a two-year stint.
Not all returning CEOs do better the second time around. On average, companies that brought back a boomerang CEO had worse yearly stock performance — 10.1% lower — compared with those with CEOs on their first go-round, according to a 2020 study published in the MIT Sloan Management Review.
Reasons can include changes to the industry and the company itself since the CEO left.
