Nestlé chair Paul Bulcke under fire after ouster of CEO Lauren Freixe

Nestlé’s chair Paul Bulcke is now under pressure to resign after the Swiss food giant abruptly fired chief executive Laurent Freixe over a romantic relationship with a subordinate — the second CEO forced out in just over a year.

Freixe, 63, was sacked last week without severance pay after Nestlé confirmed he had engaged in an undisclosed affair with a direct report. The relationship was reported to be an “open secret” within the company, according to Financial Times.

A Swiss blog reported earlier this month that Freixe was canned after a senior executive said to be his mistress allegedly caught him in a Zurich hotel with the subordinate — and then filed a complaint through the company’s anonymous hotline that triggered an internal probe.

The dismissal came barely a year after Bulcke, 71, and the board appointed him to succeed Mark Schneider, who himself was ousted in August 2024.

The back-to-back departures have left the world’s largest food and beverage company reeling, with major shareholders openly blaming Bulcke (pronounced as BULK-uh) for the turmoil.

“It’s a matter of decency and respect that [Bulcke] resigns from the position and not wait until April next year,” one top-30 Nestlé investor told the FT.

“Bulcke has lost the respect and the trust of investors.”

Nestlé swiftly named Philipp Navratil, head of its Nespresso division, as Freixe’s replacement. But shareholders said the revolving door at the top highlighted a deeper governance breakdown that has battered the company’s credibility.

“Given [CEO appointments] have gone wrong twice, I think it is time for decisive leadership at Nestlé,” Christopher Rossbach, portfolio manager at J Stern and a long-term shareholder, told FT.

He urged incoming chair Pablo Isla to take over now rather than wait until Bulcke’s scheduled departure in April 2026.

Nestlé said Freixe’s dismissal was unrelated to Schneider’s ouster, describing his conduct as a “clear breach” of the company’s code of conduct.

According to Nestlé, the board launched a probe into allegations this spring after a whistleblower complaint but initially found no evidence.

Freixe denied the affair.

A second round of complaints prompted a fresh investigation with outside counsel, which substantiated the relationship.

Rossbach called it “deeply concerning” that it took two probes to uncover the misconduct. Other investors echoed that sentiment, pointing to the heavy toll on the company’s stock price and reputation.

Nestlé shares have fallen 40% since 2022, erasing billions in market value as sales stagnated and governance scandals piled up. At the company’s annual meeting in April, nearly 10% of shareholders voted against Bulcke’s re-election as chair, while another 5.4% abstained.

Bulcke, a 46-year company veteran, became CEO in 2008 and moved to the chairmanship in 2017. His dual influence over management and the board has long been viewed as part of Nestlé’s unusual succession model.

Critics now say that system has backfired, shielding Bulcke from accountability even as the company falters.

“I don’t think Bulcke will move on before April but he should have left when Mark Schneider was forced out,” Alexandre Stucki, founder of AS Investment Management, which represents members of the Nestlé founding family, told FT.

Nestlé announced in June that Isla, the former Inditex chief who already serves as lead independent director, will replace Bulcke in April 2026.

People close to the company say Isla has been active in recent decisions, including Freixe’s dismissal. Still, skepticism remains.

“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.”

Former and current Nestlé executives told the FT that Freixe’s affair was an “open secret” inside the company, raising doubts over how Bulcke could have been unaware.

“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 Flossbach von Storch, another Nestlé shareholder.

Navratil, 49, is stepping into the CEO role after four years leading Nespresso. Analysts say his experience running a single brand may not translate to steering the entire conglomerate, which spans coffee, dairy, bottled water and confectionery.

The challenges are stark: slowing consumer demand, inflation pressures, intensifying competition from rivals such as Unilever and reputational bruises from supply chain controversies and product recalls.

For shareholders, the leadership crisis crystallizes what they see as the core problem — Bulcke’s hold on the board. They argue that until he steps down, Nestlé will struggle to regain investor trust.

“The longer he stays, the worse it gets,” one shareholder told FT.

The Post has sought comment from Nestlé.