Salesforce (CRM) - Get salesforce.com, inc. Report Chairman and now Co-Chief Executive Marc Benioff on Tuesday appointed Former President and Chief Operating Officer Bret Taylor as his co-chief executive to lead Salesforce through its next chapter.
The power-sharing arrangement was restored at the customer-relations-management-software provider, which acquired work messaging system Slack, after nearly two years since former Co-Chief Executive Keith Block left the company in February 2020.
This twin CEO approach has gained some traction in corporate America recently. Here's why.
Two months ago, private equity icon and real estate investment firm KKR (KKR) - Get KKR & Co. Inc. Report elevated its Co-Presidents Scott Nuttall and Joseph Bae to Co-Chief Executives, succeeding billionaire co-founders Henry Kravis and George Roberts.
The storied private equity firm's stock has risen close to 14% since the transition was announced on Oct. 11, according to data on Yahoo Finance. KKR’s private-equity portfolio gained 9% in the third quarter, while flagship funds rose 11%.
According to The Wall Street Journal, KKR's "portion of profit that it could return to shareholders more than doubled."
Hastings described the move as a well-deserved promotion for Sarandos who has been instrumental in shaping the entertainment firm's content strategy.
Netflix stock has risen 21.7% from July 16 last year until Tuesday's close according to data from Yahoo Finance. The company has scored blockbuster hits like "Squid Game," "Money Heist," "Bridgerton," "Sex Education" and "Queen's Gambit" under the new management structure.
The company also posted better-than-expected third-quarter earnings and said it added 4.4 million subscribers to its streaming service taking its total to 214 million.
Netflix has begun testing its gaming options in select countries and said the games will be included as part of a Netflix membership with no ads and no in-app purchases.
In August 2020, Workday (WDAY) - Get Workday, Inc. Class A Report the provider of finance and human-resources software appointed Co-President Chano Fernandez as co-CEO to serve alongside Co-Founder Aneel Bhusri.
Workday stock has risen 26.5% from August 27, 2020 through Tuesday's close according to data from Yahoo Finance.
Workday Chairman David Duffield left the company in April and Bhusri took over his role.
The company is planning to start delivering groceries curbside in San Francisco in early 2022.
Experts Remain Divided
Melanie Adams, vice president and head of corporate governance and responsible investment at RBC Global Asset Management, takes a measured view of the co-CEO dynamic.
She told The Street that while there are benefits to this arrangement, they can come with significant challenges.
"The co-CEO relationship can be productive if the CEO has a tremendous amount of work to do, for instance, when the company is in its growth stage and there is too much burden on one person's shoulder," Adams said in call with The Street from Toronto.
John Gerzema and Will Johnson have been co-CEOs of public opinion, social intelligence and corporate reputation firm The Harris Poll since 2017.
They urged companies to "rethink their structures" and "embrace" this new management structure so that the modern American CEO is not overwhelmed by unrealistic demands in a September 2020 article published by Harvard Business Review.
However, Adams was quick to add that it can be very challenging to find the right partner, and pointed out that compensation structures and succession planning become more complex under such arrangements.
"How will the two co-CEOs be compensated and what does that relationship look like vis-à-vis shareholders? What does succession planning look like? How will the roles and responsibilities get divided and how is accountability determined?" she added.
Adams added if the CEO is in-charge of numerous areas or divisions that could sometimes lead to bottlenecks in decision making. Then, having a co-CEO with the right expertise could prove to be an efficient use of time and resources.