Nestle Dismisses CEO Freixe Following Unrevealed Relationship with Employee
Written by Emily J. Thompson, Senior Investment Analyst
Source: Reuters
Nestlé's CEO Dismissal
- Abrupt Removal: Nestlé has dismissed CEO Laurent Freixe due to his failure to disclose a romantic relationship with a subordinate, just one year after he took over the position.
- New Leadership: Philipp Navratil, previously head of the Nespresso coffee unit, has been appointed as the new CEO effective immediately.
Investigation Details
- Internal Investigation: Concerns about Freixe's relationship first arose in spring through an internal hotline, leading to an initial inconclusive investigation by the board.
- Second Probe: A subsequent investigation, overseen by Chairman Paul Bulcke and Lead Independent Director Pablo Isla, confirmed the relationship, which Freixe initially denied.
Company Impact
- No Exit Package: Freixe will not receive an exit package following his dismissal.
- Market Reaction: Nestlé shares have dropped 17% over the past year, underperforming compared to rivals and the broader market.
Broader Context
- Management Reshuffles: This incident is part of a larger trend of management changes in major consumer goods companies, including rivals like Unilever and Diageo.
- Increased Scrutiny: Top management conduct is facing heightened scrutiny, particularly in the U.S., as seen with other companies like Kohl's and Astronomer.
Navratil's Background
- Career at Nestlé: Navratil has been with Nestlé since 2001, holding various roles including country manager for Honduras and leading the coffee and beverage business in Mexico before his recent position at Nespresso.
Analyst Views on HSY
Wall Street analysts forecast HSY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for HSY is 196.27 USD with a low forecast of 181.00 USD and a high forecast of 222.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
3 Buy
14 Hold
0 Sell
Hold
Current: 190.650
Low
181.00
Averages
196.27
High
222.00
Current: 190.650
Low
181.00
Averages
196.27
High
222.00
About HSY
The Hershey Company is a snacks company. The Company's segments include North America Confectionery, North America Salty Snacks and International. The North America Confectionery segment is responsible for its traditional chocolate and non-chocolate confectionery market position in the United States and Canada. This includes its business in chocolate and non-chocolate confectionery, gum and refreshment products, protein bars, spreads, snack bites and mixes, as well as pantry and food service lines. This segment also includes its retail operations. The North America Salty Snacks segment is responsible for its salty snacking products in the United States. This includes ready-to-eat popcorn, baked and trans fat free snacks, pretzels and other snacks. The Company's portfolio includes chocolate and confectionery brands such as Hershey's, Reese's, Kisses, Kit Kat, Jolly Rancher, Ice Breakers, LesserEvil, Shaq-a-licious alongside salty snacks, including SkinnyPop and Dot's Homestyle Pretzels.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
