Nestle has abruptly dismissed its CEO Laurent Freixe for failing to disclose a romantic relationship with a subordinate, the Swiss food giant said on Monday, a dramatic removal exactly a year after he took the reins.

The maker of products ranging from KitKat to Nesquik said that it had appointed veteran insider Philipp Navratil, who had headed the Nespresso coffee unit, as Freixe’s successor with immediate effect.

The shock departure threatens more volatility for Nestle amid a tough consumer environment and the disruptive US trade tariffs.

Nestle said Freixe’s departure follows an investigation overseen by Chairman Paul Bulcke and Lead Independent Director Pablo Isla into an undisclosed romantic relationship with a direct subordinate, which breached the company’s code of business conduct.

“This was a necessary decision,” Bulcke said in a statement. “Nestle’s values and governance are strong foundations of our company. I thank Laurent for his years of service.”

The firm announced in June that Bulcke, its long-standing chairman, would stand down next year.

A company spokesman told Reuters concerns about a possible relationship between Freixe and a direct report first emerged in the spring through an internal company hotline. The board of directors immediately opened an investigation into the matter, which was however inconclusive, this person added.

As the concerns persisted, the company launched a second probe, overseen by Bulcke and Isla and with the help of an external firm, which confirmed the relationship. Freixe had initially denied the relationship to the board, the spokesperson added.

The ousted executive will not receive an exit package after his dismissal, Nestle told Reuters.

The CEO’s abrupt removal comes exactly one year after Nestle ousted his predecessor Mark Schneider, raising questions on its next course of action even though the company said it would not change course on strategy and targets.

“This new change is likely to keep afloat the question mark about the mid-term direction of the company,” JP Morgan analysts said in a note to clients.

Nestle shares have fallen 17% over the past year, lagging its rivals and the broader market.

The sudden exit is the latest management reshuffle at a global consumer goods and food company this year, including Nestle rival Unilever, Diageo and Hershey.

Top management’s conduct has come under intense scrutiny, particularly in the United States. Kohl’s fired CEO Ashley Buchanan in May after an investigation found he had pushed for deals with a vendor with whom he had a personal relationship, after little more than 100 days in the position.

And Astronomer CEO Andy Byron resigned in July after being caught on camera embracing a staffer at a Coldplay concert.

Navratil began his career with Nestle in 2001 as an internal auditor. After holding various commercial roles in Central America, he was appointed country manager for Nestle Honduras in 2009.

He assumed leadership of the coffee and beverage business in Mexico in 2013, and transitioned to Nestle’s Coffee strategic business unit in 2020.

He moved to Nespresso in July 2024, and joined the Nestle executive board on January 1 this year.(CNN)

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