By Spencer Jakab

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When you wish upon a star, results will vary.

Walt Disney's earnings this morning marked three years since Bob Iger returned for what was supposed to be a two-year encore as chief executive. It hasn't gone well.

Iger's original tenure was magical. This time around, Disney shares have trailed the S&P 500 by nearly 50 percentage points and those of streaming rival Netflix by more than 250. As is typical for a boomerang CEO, the market's initial reaction was hopeful, with a 5% jump in Disney's stock after the announcement.

It's easy to understand why boards bring back living legends: They know the company and have the clout to make radical changes. There have been some notable successes.

The return of Steve Jobs to Apple in 1997, 12 years after he was fired, surely tops the list. Starbucks boss Howard Schultz had two successful homecomings. (Some shareholders may wish for a third right now.)

Less remembered are disappointing episodes. A.G. Lafley seemingly could do no wrong during his long stint as Procter & Gamble CEO. But his two-and-a-half-year return that ended in 2015 was disappointing, despite some bold moves. The stock lagged behind the market and rival Colgate-Palmolive.

Michael Dell, who founded the eponymous PC maker and left in 2004, fared poorly after his 2007 return. Along with other investors, he took the company private at a price that disappointed.

Yahoo's co-founder Jerry Yang rejected a $45 billion takeover offer from Microsoft during a CEO stint well after its dot-com heyday.

Jack Dorsey, also a founder, had a disappointing return as Twitter's CEO. Worst of all was Ken Lay, who came back to run Enron months before its house of cards collapsed.

A study published in MIT Sloan Management Review concludes that share prices under boomerang CEOs trail their original tenures by 10.1 percentage points a year, on average.

Reviewing old stock-price charts may make us remember winners too fondly. After all, returning bosses, including Iger, often pick underwhelming successors and leave a management bench so shallow that bringing them back seemed like the best option.

Boomerang CEOs even get a head start of sorts since share prices are usually depressed when they're recalled. But life comes at you fast, and sometimes once-dominant businesses get overtaken.

At least Iger had the saving grace of Disney's hugely profitable theme parks. The most amazing executive would struggle to fix businesses like cable and streaming. As Warren Buffett put it:

"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

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November 13, 2025 10:22 ET (15:22 GMT)

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