Nestlé CEO Fired for Undisclosed Office Romance, Marking Second Exit in a Year and Trust Crisis at Century-Old Giant

TradingKey - Swiss food and beverage giant Nestlé announced a major personnel change on September 1, revealing that the board dismissed CEO Laurent Freixe for violating the company's Code of Business Conduct due to an undisclosed romantic relationship with a direct subordinate.

The decision was made following an investigation supervised by Chairman Paul Bulcke and Lead Independent Director Pablo Isla with the assistance of independent external advisors. Freixe, who assumed office in September 2024, served only one year — the latest multinational executive to depart due to workplace ethics issues.

A Nestlé veteran since 1986, Freixe had previously overseen European and Latin American operations and succeeded Mark Schneider as CEO in 2024, following Schneider's dismissal for being a "cultural misfit." His career at Nestlé now ends in such an undignified manner, evoking widespread commentary.

The board emphasized in its statement that Freixe's dismissal centered on "violating company values," as Nestlé's Code of Business Conduct explicitly prohibits executives from engaging in undisclosed intimate relationships with subordinates to avoid conflicts of interest and abuse of power.

Nestlé Chairman Paul Bulcke stated, "This was a necessary decision. Nestlé's values and governance are the solid foundation of our company. I thank Laurent for his many years of service to Nestlé."

Nestlé swiftly appointed 52-year-old internal executive Philipp Navratil as the new CEO. Navratil brings extensive experience and notable achievements within Nestlé, having joined the Nestlé Coffee Strategic Business Unit in 2020 to lead global strategy formulation and implementation for the brand. He took charge of the Nespresso brand in July 2024 and earned a seat on Nestlé's Executive Committee in January 2025 due to his outstanding performance.

"Philipp is recognized for his impressive track record of achieving results in challenging environments," Bulcke said. "Renowned for his dynamic presence, he inspires teams and leads with a collaborative, inclusive management style.

"The Board is confident that he will drive our growth plans forward and accelerate efficiency efforts," he added. "We are not changing course on strategy, and we will not lose pace on performance."

Facing new challenges and opportunities, "I am honored by the trust the Board has placed in me, and it is a privilege to take on the responsibility of leading Nestlé into the future," Navratil said. "I fully embrace the company's strategic direction, as well as the action plan in place to drive Nestlé's performance.

This sudden senior leadership change occurs while Nestlé is already in a period of low market confidence. Public data from the SIX Swiss Exchange shows the company's stock has declined 30% over the past five years. During Freixe's brief tenure, the stock fell 17%, significantly underperforming European industry peers, with investor confidence already eroded.

Now, the private relationship scandal surrounding Freixe has undoubtedly plunged the company into new turmoil, further intensifying market concerns about its prospects.

“We are disappointed that the new CEO is boxed in for now to follow his predecessor’s strategy at a time where the market is doubting the outcome with Nestlé’s share valuation at a historical low,” said analysts from JPMorgan in a note. “This new change is likely to keep afloat the question mark about the mid-term direction of the company.”

The bank's analysts further noted that Freixe's sudden departure not only failed to reassure investors but may intensify concerns, as this marks the second time within one year that the company has hastily appointed a new leader without conducting a thorough, extensive search for external candidates.

Kepler Cheuvreux analyst Jon Cox stated bluntly: "This is not the Nestle way to do things, to have two CEO replacements in just over a year," and short-term stock pressure is likely.