Nestle shares slipped on Wednesday after the Swiss food giant announced the earlier-than-expected departure of its chairman, just weeks after the sudden ouster of its chief executive over an office relationship.
The multinational behind Nespresso coffee capsules and KitKat chocolate bars announced late Tuesday that its longtime chairman Paul Bulcke would step down “earlier than planned” on October 1.
Bulcke, who had been scheduled to remain in his position until next April, is being replaced by vice-chairman Pablo Isla, the company said.
Nestle shares were down 0.51 percent to 71.52 Swiss francs ($90.80) in early trading after opening slightly higher, weighing on the Swiss stock exchange’s main SMI index, which fell 0.31 percent.
Paul Bulcke has been Nestle’s chairman since 2017 – Copyright AFP/File Roslan RAHMAN
The announcement of Bulcke’s early departure came only two weeks after Nestle said it had dismissed Laurent Freixe as chief executive with immediate effect over an “undisclosed romantic relationship with a direct subordinate”.
The board chose to replace Freixe, who had been in his position for just a year, with Nespresso director Philipp Navratil.
According to observers, Nestle investors had since been pushing for Bulcke — a Belgian national who served as Nestle CEO for nearly a decade before becoming chairman in 2017 — to step down.
The Financial Times reported that investors blamed him for a chaotic period at the company that culminated with Freixe’s ouster.
“Pressure from investors had mounted to a peak in recent weeks following the turmoil involving former CEO Laurent Freixe,” Vontobel analyst Jean-Philippe Bertschy said in a note.
“Nestle needs to return to calmer waters and regain its former stature.”
Patrik Schwendimann, an analyst at Zurich Cantonal Bank, agreed.
“The early resignation comes as little surprise after the events of the past few weeks,” he wrote in a note, adding that Bulcke’s departure should allow “Nestle to focus on the future, hopefully with less background noise”.
