Nestlé investors call for chair to step down over executive turmoil
Paul Bulcke has presided over chaotic period culminating in sacking of CEO Laurent Freixe for undisclosed affair
Nestlé investors have called for chair Paul Bulcke to step down over the departure of a second chief executive in just over a year, blaming him for a period of instability and poor performance at the embattled Swiss group.
The consumer goods giant last week sacked chief executive Laurent Freixe, who was appointed by Bulcke just one year ago, over an undisclosed romantic relationship with a direct subordinate.
Shareholders told the FT that the appointment of Freixe and the way investigations into his conduct were handled have exacerbated their concerns over governance at Nestlé, and led them to question Bulcke’s decision making.
“It’s a matter of decency and respect that [Bulcke] resigns from the position and not wait until April next year,” said one top-30 Nestlé shareholder, referring to the chair’s scheduled departure date. “Bulcke has lost the respect and the trust of investors.”
Nestlé ousted Freixe with no severance pay and swiftly replaced him with the head of the company’s Nespresso business, Philipp Navratil.
The Frenchman became the second chief executive to be ousted in just over a year after Bulcke, a Nestlé veteran of 46 years, and the board pushed out his predecessor Mark Schneider in August last year.
“Given [CEO appointments] have gone wrong twice, I think it is time for decisive leadership at Nestlé,” said Christopher Rossbach, portfolio manager at J Stern, a long-term shareholder.
Rossbach added that he would like to see chair designate Pablo Isla assume the role now, to coincide with Navratil’s appointment.
A Nestlé spokesperson said the two CEO departures were “entirely unrelated”, pointing out that Freixe’s conduct was a “clear breach” of its code of conduct.
The maker of KitKats and Nescafé announced in June that former Inditex chief Isla, who currently serves as Nestlé’s lead independent director, would replace Bulcke in April 2026. Isla was already actively involved with decision making, said a person close to the company, including in the latest CEO change.
Bulcke became Nestlé chief executive in 2008, before being appointed chair in 2017, in line with the company’s long-standing and unconventional approach to succession.
“I don’t think Bulcke will move on before April but he should have left when Mark Schneider was forced out,” said Alexandre Stucki, founder of AS Investment Management, which represents founding family investors in Nestlé.
“It is the board who makes these appointments,” he added. “They need to wake up and look at the share price . . . I am very worried about the company’s immediate future”.
At the company’s last annual general meeting, in April, 9.7 per cent of shareholders voted against Bulcke’s re-election, while 5.4 per cent abstained.
Investors in Nestlé, which also owns Maggi noodles and Perrier water, were once accustomed to steady growth and sound governance.
However a series of scandals and sluggish sales, as well as mounting concerns over governance, have combined to drive down Nestlé’s shares, which have slumped by 40 per cent since 2022.
Nestlé said the board acted immediately to investigate claims about Freixe’s conduct, launching a probe in the spring on the back of reports made through its internal whistleblowing channel.
After it failed to substantiate the claims — and Freixe denied the affair — the company received more detailed complaints from whistleblowers. The board then initiated a second investigation involving external counsel, which found evidence of the relationship.
J Stern’s Rossbach said it was “deeply concerning” that it took a second investigation to uncover the relationship. Nestlé said its values and governance “are the foundation of the company”.
Several former and current Nestlé executives the FT spoke to questioned how Bulcke could have been unaware of Freixe’s affair, which they characterised as an open secret.
“If it turns out that the chair knew more than he admitted, it will become clear that the company is suffering from weak governance and poor oversight,” said Kai Lehmann, senior analyst at Nestlé shareholder Flossbach von Storch.
Others questioned whether incoming chair Isla, who has served on the board since 2018, represents a fresh start.
“The board is weak and the new chairman is part of that legacy,” said one Swiss institutional investor. “They need change, someone external . . . to stop this dynamic”.