Nestlé has terminated the employment of its chief executive officer after a tenure of only one year, citing a failure to disclose a “romantic relationship” with a “direct subordinate.”
The Swiss multinational food and beverage conglomerate, known for brands such as Kit Kat and Nespresso, announced that Laurent Freixe was dismissed with “immediate effect” following an inquiry conducted by Nestlé’s chair and lead independent director.
Sources indicate to the BBC that the investigation was initiated by a report submitted through the company’s internal whistleblowing mechanism.
Nestlé Chair Paul Bulcke stated: “This was a necessary decision. Nestlé’s values and governance are strong foundations of our company. I thank Laurent for his years of service at Nestlé.”
According to sources, the relationship involved an employee not serving on the executive board, and the investigation was prompted by the potential conflict of interest.
Alongside Mr. Bulcke, independent director Pablo Isla supervised the inquiry into Mr. Freixe, “with the support of independent outside counsel.”
The Financial Times reports that concerns regarding Mr. Freixe’s relationship with an employee surfaced earlier this year. An initial internal investigation deemed the claims unsubstantiated.
Following persistent concerns, the newspaper reports that Nestlé launched a subsequent investigation, aided by external legal counsel, which ultimately substantiated the claims.
A Nestlé spokesperson affirmed: “We acted at all times in line with best practice corporate governance.”
“The external investigation was opened shortly after the initial internal investigation, and today’s decision shows that we are taking allegations and investigations seriously.”
Mr. Freixe, a Nestlé veteran of nearly four decades, assumed the role of global chief executive last September, succeeding Mark Schneider.
Nestlé has confirmed that Mr. Freixe will not receive a severance package.
The BBC has reached out to Mr. Freixe for comment.
Philipp Navratil, who joined Nestlé in 2001, has been appointed as Mr. Freixe’s successor.
Mr. Bulcke stated that the company was “not changing course on strategy and we will not lose pace on performance.”
Mr. Bulcke is expected to step down as chair next year, and Mr. Isla, formerly the chief executive of Inditex, parent company of Zara, has been nominated as his replacement.
Other organizations have similarly terminated the employment of their chief executives following investigations into personal relationships with colleagues.
BP chief executive Bernard Looney, who led the oil giant for three years, resigned after acknowledging a lack of “full transparency” in initial disclosures.
Steve Easterbrook was terminated by McDonald’s in 2019 after the discovery of a consensual relationship with an employee.
Subsequent investigation by McDonald’s revealed three additional relationships with staff involving the former British executive.
Mr. Easterbrook initially received a $105 million (£77.5 million) severance package, which was later returned. In 2023, he was fined $400,000 by the U.S. Securities and Exchange Commission for misleading investors. He paid the penalty without admitting or denying the allegations.
Additional reporting by Dearbail Jordan.