Nestlé has dismissed CEO Laurent Freixe with immediate effect after an investigation into a “romantic relationship with a direct subordinate”.
The Swiss food giant named Nespresso boss Philipp Navratil as his replacement.
Freixe’s departure came after a probe by chair Paul Bulcke and lead independent director Pablo Isla with the support of outside counsel.
“This was a necessary decision,” said Bulcke. “Nestlé’s values and governance are strong foundations of our company. I thank Laurent for his years of service.”
Nestlé first launched an investigation into Freixe’s personal relationship with a colleague last year after complaints were made through Nestlé’s internal complaints system, according to the Financial Times. These were primarily based on potential conflicts of interest and favouritism.
Nestlé initially found the claims to be unsubstantiated but launched a new investigation with outside support after complaints persisted.
Freixe was promoted to CEO in September last year after 40 years with the company, replacing his predecessor, Mark Schneider. Nestlé confirmed he would not receive an exit package after his dismissal.
His departure adds another difficulty for the maker of Kit Kat and Nescafé, with its share price down almost 17% since Freixe took over amid slowing sales and falling profits.
In July, it launched a review of its underperforming vitamins business after first-half sales volumes missed expectations and said this could lead to the sale of some brands.
“This new change is likely to keep afloat the question mark about the mid-term direction of the company,” said JP Morgan analysts.
Freixe’s replacement, Navratil, began his career with Nestlé in 2001 as an internal auditor, moving up to country manager for Nestlé Honduras in 2009.
He took over the Mexican coffee and beverage business in 2013, and moved to Nestlé’s coffee strategic business unit in 2020. He joined Nespresso in July 2024 and became a member of the Nestlé executive board on 1 January this year.
“The board is confident that he will drive our growth plans forward and accelerate efficiency efforts,” Bulcke said. “We are not changing course on strategy, and we will not lose pace on performance.”
Jean-Philippe Bertschy, an analyst for Vontobel, said the leadership change had come at a “sensitive juncture” for Nestlé.
“The appointment of Philipp Navratil, a proven leader with an excellent track record, is encouraging… as investors’ nerves have been tested for several months,” he said.
But some analysts raised concerns over Nestlé appointing a second boss in a year without a comprehensive search.
“This is not the Nestlé way to do things, to have two CEO replacements in just over a year,” said Jon Cox, an analyst at Kepler Cheuvreux. “Hopefully this will get them back on the straight and narrow.”
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