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 succeed Bob Iger as the company’s next CEO.

Disney has publicly stated that it will name Iger’s successor in early 2026. Two internal candidates emerge 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 to the theme parks division until leading the unit when its former leader, Bob Chapek, was named Disney CEO in 2020.

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

It is a strategic rival Netflix has been used similarly – and effectively – since 2020, when Reed Hastings named Ted Sarandos his co-CEO. Three years later, Hastings relinquished that position and became executive chairman of the company, elevating Greg Peters to co-CEO.

Last year, Iger called Sarandos and asked him about Netflix’s co-CEO model, CNBC confirmed, based on interviews with people familiar with the matter. This call was first reported by Wall Street.

Netflix’s success has contributed to a recent wave of co-CEOs. 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 run the company; And Comcast tapped Chairman Mike Cavanagh to join longtime CEO Brian Roberts in the lead role.

But while a dueling CEO structure may superficially make sense for Disney, company executives and corporate governance experts caution that there are Mouse House-specific considerations that would make such a dynamic unwise.

Netflix has a specific set of circumstances that make a co-CEO structure feasible.

For starters, Sarandos and co-CEO Peters have different areas of passion, according to people familiar with Netflix’s leadership styles, who asked to remain anonymous because the details are private. This allowed the two leaders to make decisions without stepping on each other’s toes.

If Sarandos and Peters disagree on something, they resolve the issue by deferring to the leader who is most passionate about the answer. This generally means Sarandos wins 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 is a gray area, the co-CEOs can always lean on Hastings, co-founder and CEO of the company for 25 years. Peters and Sarandos worked together under Hastings for many years. That comfort level — and Netflix’s famously non-hierarchical corporate culture — has helped maintain a dual CEO structure without turf wars and while still serving shareholders, Sarandos told Iger, according to close sources.

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

On the surface, 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 rise to the position of executive chairman, keeping him in the ranks the same way Hastings did.

The selection of Walden and D’Amaro as Iger’s long-awaited successors could allow Disney to retain both company leaders. If the board chooses one over the other, Disney risks losing a top executive who might like a chance to be CEO elsewhere. This happened to Disney in 2020, when streaming chief Kevin Mayer left the company to become CEO of TikTok after being replaced by Chapek.

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

First, if Iger remains on the board, some employees – and external partners – might still view him as a CEO. This could undermine the power-sharing structure between the 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 post, Iger has developed a reputation for wanting to remain Disney’s big boss. He was pushed back out of retirement five times to stay at the helm, and he returned to replace Chapek in 2022 after selecting him as his replacement.

Second, during Chapek’s tenure, Iger did not immediately abandon his operational responsibilities completely, choosing to lead the company’s “creative efforts” for over a year. This has led to a power-sharing situation between Iger and Chapek, as CNBC detailed in 2023. Even though Walden and D’Amaro have different domain strengths, choosing a co-CEO model after going through a recent period where the lines of control were blurred may be a case of failing to learn from one’s mistakes.

Third, Walden and D’Amaro have not worked together as long as Peters and Sarandos (or other successful long-term co-leader deals, such as the CAA co-chair deal with Bryan Lourd, Richard Lovett, and Kevin Huvane). Walden worked as co-president with Gary Newman at Fox for many years at the helm of Fox TV, proving that she is capable of succeeding in such an arrangement, but it is unclear whether she would relish the opportunity to return as a pair.

Fourth, Disney’s corporate culture is notoriously political. The company went through several tortured succession processes with Iger and former Disney CEO Michael Eisner. While Netflix is ​​largely untouched by mergers and acquisitions, Disney is an amalgamation of numerous acquisitions and units over the years, including ABC, ESPN, Fox, Pixar, Marvel and Lucasfilm. This brought together employees from many different cultures, rather than fostering a unified corporate mindset from inception.

“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 this, traditional corporate governance experts have largely rejected the co-CEO setup as suboptimal.

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

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

Still, there are mitigating factors that can make a co-CEO deal more acceptable, Elson said. Having Hastings as executive chairman is likely important for Netflix, as he can act as the de facto deciding factor in a co-CEO deal.

Likewise, a co-CEO structure can work if it is clearly designed for longer succession planning, such as Comcast’s decision to elevate Cavanagh to co-CEO alongside Roberts, Elson said.

When things are going well, Hastings and Roberts can make the call on the most important decisions, Elson said. Roberts is the majority shareholder of Comcast. Likewise, Oracle has a majority shareholder, co-founder Larry Ellison.

Although Iger could play a pivotal role for Disney as executive chairman, he is not one of the company’s founders and owns less than 1% of the shares outstanding. That gives him less leverage in the game for Disney’s future than someone like Roberts or Ellison, Elson noted.

Choosing just one CEO may be a leap of faith for Disney’s board, but it’s better than creating instability, Elson said.

“Inevitably one CEO dominates and the other leaves,” he said. “It’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 in Comcast’s planned spinoff of Versant.