Why co-CEOs may be a bad idea

As 2025 enters its final months, Disney inches closer to the announcement the entire entertainment industry has been waiting for — who will take over for Bob Iger as the company’s next CEO.

Disney has publicly stated it will name Iger’s successor in early 2026. Two internal candidates stand out as the most likely contenders: Disney Entertainment co-chairman Dana Walden and Disney Experiences chairman Josh D’Amaro. Walden brings decades of Hollywood expertise; D’Amaro worked in consumer products before his elevation in the theme parks division all the way up to running the unit when its previous leader, Bob Chapek, was named Disney CEO in 2020.

Given Walden’s and D’Amaro’s complementary skill sets — and given recent momentum behind co-CEO appointments both in media and beyond — the Disney board could opt to select both to jointly replace Iger.

It’s a strategy rival Netflix has similarly — and effectively — used since 2020, when Reed Hastings named Ted Sarandos his co-CEO. Three years later, Hastings relinquished that post and moved on to become the company’s executive chairman, elevating Greg Peters into his spot as co-CEO.

Netflix’s success has contributed to a recent co-CEO wave. Last month, Spotify named Alex Norstrom and Gustav Soderstrom as co-CEOs to replace founder Daniel Ek; Oracle named Clay Magouyrk and Mike Sicilia to jointly lead the company; and Comcast tapped president Mike Cavanagh to join longtime CEO Brian Roberts in the chief role.

But while a duel CEO structure may superficially make sense for Disney, company insiders and corporate governance experts warn there are considerations specific to the Mouse House that would make such a dynamic unwise.

Last year, Iger called Sarandos and asked him about Netflix’s co-CEO model. That call was first reported by the Wall Street Journal in November, and CNBC can confirm it took place, according to people familiar with the matter.

Sarandos and co-CEO Peters have different areas of passion, according to people familiar with Netflix’s leadership styles, who asked to remain unnamed because the details are private. That’s allowed the two leaders to make decisions without stepping on each other’s toes. If Sarandos and Peters disagree on something, they work it out by deferring to the leader who is more passionate about the answer. That typically means Sarandos wins out if it’s a content or creative decision, and Peters triumphs if the decision is more product- or technology-based. A Netflix spokesperson declined to comment.

If there’s a grey area, the co-CEOs can always fall back on Hastings, the company’s co-founder and CEO of 25 years. Peters and Sarandos worked together under Hastings for many years. That comfort level — and Netflix’s famously un-hierarchical corporate culture — have helped maintain a dual CEO structure without turf wars and while serving shareholders, Sarandos told Iger, according to the people familiar.

Since Peters stepped in as co-CEO in January 2023, Netflix shares have gained about 275%.

At first glance, Walden and D’Amaro present a similar dynamic to Sarandos and Peters. Walden’s expertise is Hollywood, and D’Amaro’s is parks and consumer products. Iger could theoretically advance to the executive chairman role, keeping him around in a similar fashion to Hastings.

Selecting both Walden and D’Amaro as Iger’s long-awaited successor may allow Disney to keep both leaders at the company. If the board chooses one over the other, Disney risks losing a top executive who may want a chance to be CEO elsewhere. This happened to Disney in 2020, when streaming chief Kevin Mayer departed the company to become TikTok’s CEO after he was passed over for Chapek.

But a Disney co-CEO arrangement also comes with a number of red flags that don’t exist at other companies.

First, if Iger sticks around on the board, some employees — and external partners — may still view him as a CEO. That could undercut the power-sharing structure of two CEOs, especially given Iger’s reputation for wanting to remain the company’s No. 1 leader.

While Hastings has turned his attention to hobbies like skiing since giving up his CEO role, Iger has developed a reputation for wanting to hang around as Disney’s head honcho. He’s five times pushed backed retirement to remain at the helm, and he came back to replace Chapek in 2022 after hand-picking him as his replacement.

Second, during Chapek’s tenure, Iger didn’t fully give up his operational responsibilities right away, choosing to direct the company’s “creative endeavors” for more than a year. That led to an ugly power-sharing situation between Iger and Chapek, as CNBC detailed in 2023. Even if Walden and D’Amaro have different domain strengths, choosing a co-CEO model after suffering through a recent time period where control lines were blurred may be a case of failing to learn from one’s mistakes.

Third, Walden and D’Amaro haven’t worked together as long as Peters and Sarandos (or other co-leader arrangements with long-term success, such as CAA’s co-chairman arrangement with Bryan Lourd, Richard Lovett and Kevin Huvane). Walden did work in a co-chair arrangement with Gary Newman at Fox for many years running Fox TV, proving she’s capable of succeeding in such an arrangement, but it’s unclear if she’d relish the opportunity to go back to a pairing.

Fourth, Disney’s corporate culture is famously political. The company has had several tortured succession processes with Iger and Disney’s former CEO Michael Eisner. While Netflix is largely untouched by M&A, Disney is an amalgam of many acquisitions and units over the years, including ABC, ESPN, Fox, Pixar, Marvel and Lucasfilm. That’s brought employees from many different cultures together, rather than breeding a unified corporate mindset from its founding.

“It wouldn’t work for Disney,” a senior media executive told CNBC privately. “There would be so much backbiting. That’s how it’s always been there.”

A Disney spokesperson declined to comment.

On top of all of that, traditional corporate governance experts have broadly dismissed a co-CEO setup as suboptimal.

About 1.2% of companies in the Russell 3000 index have employed a co-CEO structure at any given time in recent years, The Wall Street Journal reported last month, citing data from Equilar.

“When you create two sources of authority in an organization, that’s never good,” said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, in an interview. “Two in charge means no one is in charge.”

Still, there are mitigating factors that can make a co-CEO arrangement more palatable, Elson said. Having Hastings as executive chairman is likely important for Netflix because he can act as a de-facto tiebreaker in a co-CEO arrangement.

Similarly, a co-CEO structure can work if it’s clearly done for more-drawn-out succession planning, such as Comcast’s decision to elevate Cavanagh to co-CEO alongside Roberts, said Elson.

When push comes to shove, Hastings and Roberts can make the deciding calls on the biggest decisions, Elson said. Roberts is Comcast’s controlling shareholder. Oracle similarly has a controlling shareholder in co-founder Larry Ellison.

While Iger could play a tie-breaking role for Disney as executive chairman, he isn’t a founder of the company and owns less than 1% of shares outstanding. That gives him less skin in the game for the Disney’s future than someone like Roberts or Ellison, noted Elson.

Selecting just one CEO may be a leap of faith for the Disney board, but it’s better than setting up instability, said Elson.

“Inevitably, one CEO dominates and the other one goes away,” he said. “That’s the nature of humanity.”

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC upon Comcast’s planned spinoff of Versant.