Nestlé CEO's unraveling started with a tip to an employee hotline

Nestlé Chief Executive Laurent Freixe's downfall started with an anonymous tip to an internal hotline called "Speak Up."

- Margot Patrick & Joe Wallace

Freixe was having an intimate relationship with a marketing executive who reported to him, the tipster reported. The couple initially denied any relationship, the company said.

It took two investigations, more hotline reports and a letter to the Nestlé chairman before the food company acted, dismissing Freixe on Monday for breaking its conduct code. Freixe didn't respond to requests for comment.

The executive's downfall throws Nestlé into disarray after the company abruptly ousted its previous chief for underperformance.

Freixe, 63 years old and at Nestlé since 1986, had refocused the company on core brands such as Nescafé instant coffee, KitKat chocolate bars and Fancy Feast cat food since being named to the job a year ago. The French CEO slashed costs to reinvest in more-promising products such as cold coffee, and shored up Nestlé's executive team at the company's headquarters on the shores of Lake Geneva.

Freixe's dismissal also sends a message that no one is above the rules at the company based in Vevey, Switzerland. Nestlé says reports received last year to the Speak Up line led to more than 100 staffers leaving.

Freixe's Swiss successor, Philipp Navratil, faces the task of arresting a yearslong slide in the company's shares and restoring calm after a series of scandals, snafus and executive departures. Navratil, 49, most recently served as CEO of Nestlé's Nespresso brand. He joined the executive board in January.

Navratil joined the company as an internal auditor in 2001. In recent years, he led a unit responsible for the strategy of the company's coffee business. He hasn't run any of Nestlé's major regional operations, in contrast to his predecessor, drawing skepticism from some analysts regarding his appointment.