30 FORTUNE APRIL 2020up 44% of the UNC study’s boomer-
ang CEOs (compared with only 4%
of all CEOs in the sample). And on
average, they performed even worse
than non-founders. Often a founder’s
entrepreneurial vision no longer
meshes with the mature company’s
needs, Howell notes; the skills
involved in growing a new business
don’t necessarily translate well to
managing a behemoth. (Here again,
Jobs is a rare exception.)
Michael Dell’s tenure at his
eponymous company illustrates the
phenomenon. The stock was a world-
beater in its early years. But its shares
languished (along with Dell’s personal-
computer business) after Dell the
man returned as CEO in 2007, falling
43% before Dell took the company
private in 2013. (Dell shares have also
trailed the market since the company
went public again in 2018.) Indeed,
boomerang CEOs are particularly
unlikely to replicate their past success
in tech: The UNC study found that in
industries in which the rate of change
is rapid, such as technology, returning
CEOs perform far worse than in rela-
tively stable sectors, like industrials.
CEOs who aggressively innovate
seem more likely to buck the down-
ward trend. Ron Shaich led Panera
Bread in the 2000s, then returned
as CEO in 2012 after a two-year
break. He tore down the organiza-
tion, investing heavily to reorient
the chain around fast-casual service.
By 2017, when Panera was sold to
private equity firm JAB Holding, its
stock had soared. Starbucks’ Howard
Schultz was similarly bold when he
reoccupied the corner office in 2008,
closing stores, retraining staff, and
introducing mobile ordering across
the company.
The bad aggregate track record
notwithstanding, there are a few boo-
merang CEOs on the current scene
who have earned investors’ confi-
dence. Since founder W. Kent Taylor
returned in 2011 as CEO of the Texas
Roadhouse (TXRH, $52) restaurant
chain, the stock has returned 264%,compared with 159% for
the broader market. Taylor
has earned kudos for keep-
ing price increases modest,
allowing the $2.8 billion
chain to underprice com-
petitors. Texas Road-
house’s recent willingness
to more efficiently deploy
labor at its 611 locations is
a positive development for
the stock, says KeyBanc
analyst Eric Gonzalez.
Then there’s DuPont (DD,
$40). Breen’s knack for re-
structuring remains acute:
In early 2021, DuPont
will spin off its struggling
biosciences and nutrition
unit, enabling it to focus
on stronger industrial
businesses. Its shares trade
at valuations far below
those of its industrial peers
and have been driven even
lower by the coronavirus
crisis. But many investors
believe DuPont’s woes are
cyclical and will recede in
the long term. “Valuation
should be higher,” says
Jonas Oxgaard, an analyst
at Bern stein. Put another
way: Breen could deliver
the boomerang effect inves-
tors like, where fallen share
prices return to normal.THE BRIEF — INVESTBY THE NUMBERS167
Companies in the S&P 1500
that rehired one of their
former CEOs, 1992–2017–10%
Average annual amount by
which their stocks trailed com-
value and trailed the ... but they have lost panies run by first-stint CEOs
market during his
“boomerang” stint.ROUND 2ALEXANDRA VALENTI/THE FORBES COLLECTION—GETTY IMAGESINV.W.0420.XMIT.indd 30 FINAL 3/9/2020 12:53:43 PM