Nestlé President Paul Bulcke: Shareholders demand immediate resignation

Things are becoming increasingly uncomfortable on Nestlé's executive floor. Major shareholders of the food company are now demanding the immediate resignation of Chairman of the Board of Directors Paul Bulcke.

The background: A week ago, Nestlé fired its CEO, Laurent Freixe, for a secret love affair with a direct report. Bulcke had appointed Freixe a year ago.

Some major shareholders have now told the Financial Times (FT) that they have concerns about Nestlé's governance and are questioning Bulcke's decisions.

The reason for the concerns was not only the appointment of Laurent Freixe as Chief Operating Officer at the time, but also the manner in which the investigations into the love affair were handled. It was a matter of decency that Bulcke resign from his position immediately. Bulcke had lost the respect and trust of the shareholders. The Belgian originally intended to remain in his position until the next Annual General Meeting in April 2026.

Under his watch, two CEOs, Mark Schneider in August 2024 and Freixe, were forced to leave the otherwise solid company within a very short period of time. Philipp Navratil, the head of Nespresso, was appointed CEO to succeed Freixe without any discernible search process, which usually takes months.

A Nestlé spokesperson declined to comment on the resignation calls when contacted by the "NZZ am Sonntag." Meanwhile, a long-time shareholder told the "FT" that Nestlé President-elect Pablo Isla should take office alongside the new CEO, Navratil. Isla is not scheduled to take over from Bulcke until April.

Whether he will last until then remains to be seen. Shareholders are also questioning Bulcke's integrity. According to the FT report, Freixe's affair was an open secret. It is therefore questionable that the president was unaware of it. It is also "very worrying" that two investigations were necessary to bring Freixe's relationship to light.

Bulcke, who has been with Nestlé for 46 years, has been facing headwinds from shareholders for some time. At the last Annual General Meeting, almost a tenth of shareholders voted against his re-election—a clear signal of distrust in the otherwise harmonious shareholder democracy.

Since reaching its all-time high in January 2022, the share price has lost more than 40 percent. And since last year, Nestlé has also ceased to be Switzerland's most valuable company. These losses occurred under Bulcke's supervision and responsibility.

Nestlé's decline from a flagship company also has consequences for Swiss savers. Nestlé shares are one of the largest holdings in many investment funds and Pillar 3a pension products. Nestlé has held back the performance of these funds in recent years – while stock markets elsewhere have boomed.

It is vitally important for Nestlé that the new Nestlé CEO, Philipp Navratil, can quickly break free from the shadow of his father Bulcke and present a convincing forward-looking strategy. If simmering concerns about the company's debt situation or the sustainability of its dividends become too much to bear, Nestlé could find itself in a dangerous downward spiral.