The ‘Boomerang CEO’ Phenomenon: Why Boards Bring Leaders Back

The term “boomerang CEO” refers to a chief executive who leaves a company—through retirement, succession, or board transition—only to be rehired later to reassume the top role. While often perceived as unusual, the practice has recurred across major public companies, particularly during periods of operational stress or leadership breakdowns. Boards most frequently turn to former CEOs when a successor underperforms, exits abruptly, or loses the confidence of investors, leaving their boards of directors with few immediately credible options.

Why Companies Choose a Boomerang CEO

Research and board‑level commentary consistently point to three primary motivations for recalling a former chief executive. First is speed: a returning CEO eliminates the learning curve that typically accompanies an external hire or a first‑time chief executive. Former leaders already understand the business model, internal power dynamics, and key stakeholders, allowing them to “hit the ground running” in crisis situations. Second is investor reassurance: markets and employees often respond positively—at least initially—to the return of a familiar leader with a proven track record. Third is succession gap‑filling: in many cases, the appointment of a boomerang CEO reflects shortcomings in long‑term succession planning rather than a preferred end state. Such was the case with Bob Iger’s 2022 return to CEO at The Walt Disney Company.

How Common Are Boomerang CEOs

Despite their visibility, boomerang CEOs remain statistically rare. According to Spencer Stuart data cited by the Financial Times, only 22 S&P 500 CEOs appointed since 2010 had previously served as permanent CEO of the same company. That scarcity underscores how extraordinary such moves typically are—and how strongly they tend to be associated with periods of instability rather than strategic renewal.

The Performance Record: Myth vs. Reality

High‑profile success stories—such as Steve Jobs at Apple or Howard Schultz at Starbucks—have helped support the narrative that boomerang CEOs can restore companies to greatness. Broader empirical research, however, paints a more mixed picture. A 2020 MIT Sloan Management Review study found that companies led by boomerang CEOs underperformed peers by roughly 10% in stock performance compared with firms led by first‑time CEOs.

Additional data cited by Spencer Stuart shows that returnee CEOs in the S&P 500 delivered significantly lower market‑adjusted returns during their second tenure than during their first.

Governance Implications for Boards

From a governance perspective, the use of a boomerang CEO is often interpreted as a short‑term stabilizing measure rather than a long‑term solution. Executive search firms and governance advisors note that such appointments can signal weaknesses in leadership development pipelines, particularly if boards rely too heavily on legacy figures rather than cultivating “ready‑now” internal candidates. At the same time, boards emphasize that returning CEOs are typically asked to play a defined transitional role—to stabilize performance, reset strategy, and prepare the organization for a cleaner handoff the second time around.

How Bob Iger Fits the Pattern

Against this backdrop, Iger’s return to Disney fit squarely within the classic boomerang CEO framework. The board returned to a trusted leader following a failed succession experiment, explicitly framing his mandate as interim stabilization and succession repair rather than permanent leadership. With a recommended successor now in place and a clear timeline for Iger’s departure set, Disney’s experience illustrates both the utility—and the limits—of the boomerang CEO model in modern corporate governance.