It's true that founders begin as entrepreneurs and often falter in the transition, Bauer says. "This takes a certain amount of sophistication. The personalities it takes to launch are not the same to keep a company growing and flourishing."
Of course, not all founder/CEOs beat the market. While department store company Dillard dds, down 52% under William Dillard, is the only company among the 63 to have a down stock since 1993, 18 have underperformed the S&P 500, and most have underperformed during one stretch or another.
Whole Foods Market wfmi is up more than 1,000% under John Mackey, but that includes a drop from its $77 peak in 2006 to $43.35 Tuesday, as the company says it is investigating blog entries allegedly posted by Mackey. In 2002, Pre-Paid Legal Services settled lawsuits accusing it of providing less service than promised; its stock stayed flat for more than two years.
But most periodic slumps are born of necessity because founder/CEOs are making adjustments for the long term, West says.
Stocks commonly flounder within a few years after the founder leaves. Wal-Mart is the textbook example, says Men's Wearhouse mw CEO George Zimmer, who in 1973 co-founded a retailer that has grown to 636 stores with annual revenue of $2 billion, and where the stock price has risen 1,396% since 1993.
Zimmer says Wal-Mart wmt retained the culture established by pickup-driving founder Sam Walton and could do no wrong for a time after he stepped down. It had an authenticity with consumers, employees and stockholders. Today, Wal-Mart is the corporate "whipping boy," blamed for the world's evils, Zimmer says.
Walton died in 1992, but other companies have brought back founders in an attempt to mimic what Jobs has done during his iPod/iPhone curtain call. Schwab came out of retirement three years ago when David Pottruck, a 20-year company veteran and Schwab's handpicked successor, led the company away from its roots of discounted commissions. The stock was $9.22 a share when Schwab stepped down. It was $8.30 when he returned and has recovered to $19.26. Michael Dell left his handpicked successor Kevin Rollins in charge in 2004 with the company stock at $35.22. It was $24.22 when Dell returned in January, and has recovered slightly to $26.17.
Jerry Yang, co-founder of Yahoo yhoo in 1994, had never been CEO until June, when he replaced Terry Semel, who had been wooed to Yahoo after 24 years at Warner Bros. Yahoo has yet to mount a recovery.
No founder lasts forever. While Dell is 42 and Jobs, 52, West is 60, Smith, 63, Stonecipher, 69, Schwab and Mason are both 70, and Sperling is 86.
"It would really bother me to think that in a few years, my successor could weaken something I've spent 35 years building, my entire adult life," says Zimmer, 58. "That would be disturbing."
When pressed, Mason says it's unlikely that his successor will be as successful. On the other hand, the company has become international, and it will take someone younger to visit Sydney or São Paulo.
Smith, who does not face mandatory retirement at FedEx until he's 72, says he has been making a study of companies as they face the transition. He's not worried. The key, he says, is home-grown talent.
Zimmer also plans to promote his successor from the inside. That will avoid, he says, the troubles of Home Depot hd, which landed the highly credentialed Bob Nardelli out of the General Electric farm system. Nardelli was ousted from Home Depot in January and hired as CEO of Chrysler this month.
"I like to fish," Stonecipher says. But he likes running his company more and predicts the next two or three years, as he moves into his 70s, will be his best.
Schwab has no immediate plans to step down. Sperling is eager to get back to his books. But not until he has faith that his legacy will survive.