Former Inditex chairman Pablo Isla to succeed Paul Bulcke as Nestlé chair in 2026
Nestlé owns a 40 billion euro ($47.11 billion) stake in French beauty conglomerate L'Oréal, a key asset in its portfolio. One of Isla's first priorities, analysts said, will be defining the profile of the group's next CEO. Laurent Freixe, who replaced former CEO Mark Schneider in August 2024, is 63, prompting questions about succession planning.
'This timing ensures a smooth transition, providing ample time and space for the new leadership team to settle in,' Nestlé spokesperson Christoph Meier told Reuters, adding that the company had reviewed its succession plans in June.
Despite Nestlé's statement that Bulcke chose not to seek re-election in alignment with the company's long-term direction, analysts noted the timing was unusual—coming shortly after his re-election and nearly a year before his mandatory retirement age of 72. Bulcke was originally due to retire in 2027.
Investor frustration has been mounting in recent years. Several top-30 shareholders voiced concerns over Bulcke's support for Schneider during periods of underperformance, including a 42% drop in share price between 2022 and 2024. By contrast, rivals Unilever and Danone gained 15% and 19%, respectively, over the same period.
Additional pressure came from regulatory controversies, including Nestlé's use of banned purification methods for bottled water in France and supply chain issues in the U.S. Investors said the unexpected departure of Schneider—who had continued investor roadshows shortly before his exit—only heightened concerns.
Beyond governance, Nestlé's high debt level has drawn scrutiny. Net debt stood at 2.9 times adjusted EBITDA at the end of 2024, up from 2.5 times a year earlier, raising questions about the group's future dividend capacity.
'Shareholders only want one thing: returns. And if they're not there, then people are unhappy,' one investor commented.
With Isla's appointment, investors hope for stronger execution and a refreshed leadership style. 'We need better execution at Nestlé,' said Jaeger. 'That's why it's good to have a breath of fresh air in the position of chairman.'
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