Fresh revelations have exposed the dramatic internal collapse of the world's largest food company, Nestlé, following the discovery of its married CEO's secret affair with a female subordinate. The scandal led to the sudden ousting of chief executive Laurent Freixe, a 25-year company veteran, and triggered a period of severe turmoil that saw share values plummet.
The Rise and Spectacular Fall of a CEO
Laurent Freixe, 63, had been in the top job for merely twelve months when he was abruptly removed on September 1. The Paris-born executive, married to high-flying director Agata Balcerowska, was fired for breaching the company's code of conduct by failing to disclose a relationship with a direct report. His termination was without pay.
Freixe's career at Nestlé spanned a quarter of a century, marked by significant success. During the 2000s, as Head of Europe, he was instrumental in growing the Nescafé Dolce Gusto coffee division into a multi-billion pound annual revenue stream. However, his clandestine relationship with a younger employee, whom he promoted and gave pay rises to, ultimately orchestrated his downfall.
A Web of Favouritism and Internal Power Struggles
Insiders told the Wall Street Journal that the affair was an open secret within the iconic chocolate brand, causing widespread employee discontent. The situation grew more complex due to Freixe's rivalry with Steve Presley, a Nestlé veteran who ran the Latin America team.
Freixe allegedly promoted his mistress to a prominent role on Presley's team, where she oversaw marketing for the US, Canada, and Latin America. Presley grew suspicious that the new executive was briefing Freixe on their private meetings. This tension culminated in a meeting at Nestlé's Vevey headquarters in April, where Presley agreed to resign after nearly 30 years of service.
Freixe then assumed Presley's responsibilities, becoming his mistress's direct boss. One month later, Nestlé was inundated with complaints alleging improper favouritism. While an initial internal investigation in late July found no wrongdoing, a subsequent third-party probe by a law firm resulted in Freixe's dismissal.
Financial Fallout and a New Corporate Era
The scandal sent shockwaves through the Swiss-based conglomerate. Amid the chaos, Nestlé's share price tumbled by more than 20 percent, debt levels ballooned, and sales growth stalled. Several other major executives were also forced to step down.
The new CEO, 49-year-old Philipp Navratil, has taken drastic action to stabilise the company and restore trust. He has cut 16,000 jobs and tied executive pay more closely to performance, moves analysts see as an attempt to dismantle the firm's previous cozy practices.
In a recent podcast for staff, Navratil admitted, "Trust has been eroded with some of the events we have seen recently. Some of our making." He has promised to usher in a new generation of leadership for the 159-year-old company, one that will "question everything." The scandal serves as a stark lesson in how personal misconduct at the highest level can threaten the very foundations of a global corporate giant.
