Swiss food giant Nestlé announced on Monday (September 1) that Chief Executive Officer Laurent Freixe was immediately dismissed due to an “undisclosed romantic relationship” with a subordinate, which violated the company’s code of conduct.
At the same time, the company appointed Philipp Navratil, who had previously led Nespresso and joined the Board of Directors in January, as the new CEO, effective immediately.
Nestlé Chairman Paul Bulcke stated in a release, “This was a necessary decision. Nestlé’s values and governance are the solid foundation of our company.”
According to Reuters, the initial complaint came from an internal company reporting hotline, where an anonymous tip in the spring suggested that Freixe might be involved in a romantic relationship with a subordinate. The board then initiated an investigation, but the conclusion was not definitive.
With ongoing concerns, the company launched a second investigation led by Bulcke and Chief Independent Director Pablo Isla, with the assistance of an external firm. The investigation ultimately confirmed the existence of the romantic relationship between the two.
A Nestlé spokesperson added that Freixe initially denied the allegation but was confirmed during the investigation. Following his dismissal, Freixe will not receive any severance pay.
This unexpected change in leadership has introduced more uncertainty for Nestlé in a challenging market environment.
Nestlé reported a 1.8% decrease in sales to $50.5 billion in the first half of the year compared to the same period last year, with a 10% decline in net profit, approximately $5.7 billion. Nestlé cited rising costs related to coffee and cocoa as squeezing profit margins.
While the company maintains its full-year outlook and highlights six “big bets” new products that generated over $2.2 billion in sales, it also cautions about “macroeconomic risks and uncertainties” casting a shadow on future prospects.
Over the past year, Nestlé’s stock price has fallen by 17%, lagging behind competitors and the market index. Freixe’s sudden departure comes a year after Nestlé’s former CEO, Mark Schneider, was also ousted, prompting speculation about the company’s next steps.
Analysts at JPMorgan noted in a report, “This new change is likely to continue raising questions about the company’s medium-term development.”
However, Nestlé has stated that its strategy and goals will remain unchanged.
The newly appointed CEO Navratil joined Nestlé in 2001 as an internal auditor, later holding key positions in Central America and the coffee business division, including developing global strategies for Nescafé and Starbucks.
In 2024, he became the CEO of the Nespresso capsule coffee division and joined the Board of Directors in January 2025.
Upon assuming the CEO role, Navratil expressed in a statement, “The board’s trust in me is an honor, and the responsibility of leading Nestlé into the future is a privilege.”
Currently, Nestlé’s leadership is in a transition period.
Chairman Bulcke has announced that he will step down after Nestlé’s shareholder meeting in April 2026. Isla has been nominated as his successor.
In addition, Steve Presley, the CEO of the Americas region, announced his retirement in April after nearly 30 years of service.
Rising commodity costs and increased tariffs have exacerbated corporate pressures in the food industry. Many global consumer giants, including Unilever, Diageo, and Hershey, have also undergone management reshuffles this year.
As of now, Freixe has not publicly commented on his dismissal.