Former CEOs get together to return, but Jobs has only one

Author | Han Xing

Source | Snow Leopard Finance and Economics

Someone puts out the fire, someone adds fuel to the fire

From Liu Qiangdong of, Shi Yuzhu of Giant Network to Tang Yan of Momo, from Disney to Starbucks, all walks of life have set off a wave of CEO return.

Companies have a long-standing tradition of bringing back their former CEOs during tough times, with Wall Street dubbing them “Boomerang CEOs.”

The beautiful story of the return of the king and the support of the building at the time of its collapse is not easy to tell. There are very few former CEOs who can become Jobs, Schultz, and Liu Chuanzhi.

In 2022, a wave of returning CEOs will quietly emerge.

On November 20, 2022, Liu Qiangdong, who had stepped down as CEO for more than 7 months, suddenly returned and presented a salary cut gift to the “brothers” of’s management. On the same day, Disney, which is about to turn 100 years old, kicked out the current CEO and invited back Bob Iger (Bob Iger), who had been in charge of the company for 15 years, to save the streaming media business with growing losses.

When business encounters difficulties, some companies start to nostalgia, please go back to the former CEO who led them forward in the past. Wall Street calls this type of CEO a “Boomerang CEO.”

However, boomerangs are easier to throw than catch. The drama of the return of the king is staged from time to time, but more CEOs are powerless and can only look at their past achievements and lament.

“Fire Captain” returns to the front line

Liu Qiangdong, who had just stepped down as CEO of in April 2022, came out again not long ago.

According to a late LatePost report, on November 20, Liu Qiangdong participated in the Jingdong business management training meeting through a video call. In this three-hour meeting, Liu Qiangdong believed that the company’s operations were gradually deviating from the core strategy of “low prices”, and criticized the retail business executives by name. He also announced at the executive meeting that by the end of 2022, 10% of executives at the vice president level and above will be eliminated from the bottom.

On the second day after the meeting, Liu Qiangdong issued a letter to all employees, announcing that from January 1, 2023, all senior managers above the deputy director and above the corresponding P/T sequence will have their cash salaries reduced by 10%. ~20%, the higher the position, the more the drop.

Liu Qiangdong, who began to decentralize power in 2018, officially announced in April 2022 that he would resign from the position of CEO after 18 years. When the outside world believed that this time was really “letting go”, Liu Qiangdong, who had retired from the background for less than 8 months, “returned” strongly, and made drastic moves to reduce costs and increase efficiency for JD Group as soon as he came out.

However, just two days before Liu Qiangdong’s return, Jingdong Group released a pretty good three-quarter report: the revenue growth rate picked up, and the net profit attributable to the mother turned from loss to profit year-on-year, including Jingdong Production and Development, Jingxi, overseas business and New businesses, including technological innovation, began to make profits.

Compared with fighting fires, Liu Qiangdong’s return this time is more about clarifying the company’s core strategy and preventing problems before they happen.

Former Disney CEO Bob Iger, who came out of the rivers and lakes on the same day as Liu Qiangdong, is a real “firefighter”.

On November 20, Disney announced the resignation of current CEO Bob Chapek (Bob Chapek), and Iger will re-elect the post of Disney CEO. The former only sat on the position of CEO for 33 months, while the latter was known as the “quasi-founder” of Disney and served as CEO for 15 years from 2005 to 2020.

According to Disney’s financial report for the fourth quarter of fiscal year 2022, the streaming media business, which is regarded as the second growth curve, has expanded its operating loss from US$630 million in the same period last year to US$1.47 billion. As of November 20, Disney’s stock price has fallen by more than 40% this year.

New growth points have been unable to make profits for a long time, and investor confidence continues to decline. Disney, which is about to celebrate its 100th birthday, has to invite back the former “Prince Charming” to try to reverse the decline.

Since 2022, the global economic growth has slowed down and chills have spread everywhere. More and more former CEOs have returned to “rescue the market”.

In April last year, in the face of shrinking trading volume and declining revenue in the Chinese market, “Father of Starbucks” Howard Schultz served as interim CEO with a salary of US$1, and came out for the third time to fight the fire. His goal is to make Starbucks “the No. 1 Western consumer brand in China.”

In September, the founder and former CEO of Giant Network, Shi Yuzhu, who hadn’t updated Weibo for 7 months, posted a post announcing that he had returned to the front line of game research and development. Prior to this, the revenue scale of Giant Network has shrunk for three consecutive years (2018-2021). The 2022 semi-annual report shows that the company’s net profit attributable to the parent company fell by 13% year-on-year to 499 million yuan.

On October 28, Zhiwen Group, the parent company of Momo, issued a management change notice. The current CEO Wang Li resigned due to health reasons. The position was taken over by Tang Yan, who resigned as CEO two years ago. In the two years since Tang Yan left, Momo’s revenue and net profit have both dropped, and the number of monthly active users has decreased by about 4 million year-on-year in 2021.

Either re-assuming the role of CEO, or returning to the front line of operations, how did the former CEOs save the company from the fire?

The long-standing CEO “comeback culture”

The successful cases represented by Jobs and others are an important reason why many companies are keen to invite Boomerang CEO to return to “fire fighting”.

In 1985, Apple co-founder and former CEO Steve Jobs was expelled from Apple management because of his bossy management style. But in the 12 years since he left, Apple’s market share has shrunk from a peak of 16% to 4%. Between 1995 and 1997, Apple Computer sales fell 30%. In the first three quarters of 1997, Apple’s accumulated losses exceeded US$1 billion, and the company was on the verge of bankruptcy.

In August 1997, at the Macworld conference held in Boston, Jobs once again stood on the main stage of Apple. Dressed in his signature jeans, a black tank top and a white collarless shirt, he declared that “I am, like so many others, working together to help Apple get healthy.”

At this conference, Jobs not only announced his return, but also announced a settlement and cooperation agreement with his old rival Microsoft. Apple agreed to make IE the default browser for Macs, and Microsoft invested $150 million in Apple in exchange for non-voting shares.

On the same day, Apple’s stock price soared 33%, closing at $26.31, and its market value increased by $830 million in one day. A year after Jobs returned, the all-in-one computer iMac came out, and Apple turned around.

Another firefighting CEO who is talked about is Howard Schultz, known as the “father of Starbucks”.

During the first CEO term (1986-2000), Schultz led Starbucks from a roadside stand selling coffee beans to a world-renowned chain coffee brand.

During the financial crisis in 2008, Schultz, who had retired for 8 years, came into battle again and became the CEO of Starbucks. After taking office again, Schultz implemented a series of measures to reduce costs and increase efficiency, such as streamlining the number of stores, maximizing the benefits of a single store, and refusing blind expansion. When he stepped down as CEO for the second time in 2017, Starbucks had 28,000 stores worldwide, with a market share of 51%, an all-time high.

There is no shortage of successful cases of Boomerang CEOs “fighting fires” in China.

In 2000, Liu Chuanzhi stepped down as CEO of Lenovo Group and handed over the post to Yang Yuanqing and Guo Wei. In 2005, Liu Chuanzhi stepped down as chairman of the board of directors. In 2009, a series of financial problems in the previous merger and acquisition of IBM’s personal computer business broke out. Lenovo suffered its first fiscal year loss since its listing, and the highest single-quarter loss was close to 100 million US dollars.

Faced with operating difficulties, Liu Chuanzhi re-elected as the chairman of Lenovo Group. Through organizational structure adjustments and the establishment of executive reward mechanisms and other measures, he helped Lenovo turn losses into profits within one year.

But not all Boomerang CEOs can help the company out of the woods and return to its former glory.

Dorsey, the co-founder of Twitter, stepped down as CEO in 2008. In order to restore investor confidence and improve the slowing user growth, the board of directors invited Dorsey back as CEO.

But until the end of the second CEO term in 2021, Dorsey did not achieve the goal of returning to growth in the number of users. The problem of “zombie fans” that has plagued the platform for many years has not been resolved, but has become a “talking point” for Musk’s acquisition of Twitter. During his second term as CEO, Twitter’s share price rose only half that of the Nasdaq Composite Index.

Such failures are not uncommon. In February 2021, Huang Guangyu, the founder of Gome, officially returned, and shouted the slogan of “recovering the company’s original market position within 18 months”.

However, in the first half of 2022, Gome’s net loss was nearly 3 billion yuan, and its operating cash flow was only more than 55 million yuan. As of the end of November, Gome’s stock price has fallen by more than 94% from the high point when Huang Guangyu returned. (For details, please refer to Snow Leopard Finance and Economics “1% Company | Gome Elegy”)

Some people put out the fire, while others add fuel to the fire. It is not easy for the former CEO to come back and make a comeback.

More success than failure

The strong return of former CEOs is often accompanied by drastic reforms.

By reconciling with his old rival Microsoft, Jobs brought in the most needed funds for Apple at the time. Schultz stopped the blind expansion of stores, implemented refined operations, and cut unnecessary expenditures. Liu Chuanzhi formulated a new executive incentive mechanism to improve operating efficiency. Liu Qiangdong, under the background of reducing costs and increasing efficiency, proposed to reduce the salary of senior executives and eliminate the last position.

All kinds of countermeasures to improve the operating conditions of enterprises are inseparable from the word money.

For those CEOs who successfully rescued the fire, for a period of time after they regained power, listed companies will have two most significant changes: stock price increases and financial data improvement. These two data are not only important indicators to measure the success of the CEO’s return, but also the reason why listed companies restart the former CEO.

However, the beautiful story of the return of the king and the support of the building at the time of its collapse is not easy to tell. There are very few former CEOs who can become Jobs, Schultz, and Liu Chuanzhi.

On the one hand, it is not easy to send a positive signal and please investors by recalling a prestigious former CEO.

The MIT Sloan School of Management mentioned in a paper published in 2020 that according to statistics, the annual stock price performance of listed companies led by Boomergang CEOs in the US stock market is higher than that of their No. One term, on average 10.1 percent lower.

On the other hand, the time point when the former CEO returns is usually a difficult period for business operations, and it is even more difficult to improve financial data.

According to the annual survey by Spencer Stuart, one of the top five headhunting companies in the world, since 2010, 13 listed companies in the S&P 500 Index have employed former CEOs, and 8 of them have returned CEOs who performed worse than their first term .

The survey report shows that although the resumption of the former CEO of listed companies will bring about strategic optimization and reform, the recall of the former CEO means the departure of the current CEO, and frequent changes to the company’s strategy may not necessarily bring positive feedback.

Business managers with successful experience have always been a scarce resource. A former CEO who is familiar with the company’s business, can quickly get started, and has a certain prestige is often the best candidate for a company to change. However, their glorious achievements in the past are not only the embodiment of personal ability, but also inseparable from the development dividend of the industry and the influence of the market environment.

At that time, the world was changing, and companies wanted to get out of the trough, and the halo of the former CEOs might not be enough.

(Disclaimer: This article only represents the author’s point of view, not the position of

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