Nestle puts pressure on underachievers with new bonus structure

Nestle NESN.S has introduced a new system for measuring performance that will give high achievers more lucrative bonuses and little to no rewards for those falling short of standards, the company said on Wednesday, as CEO Philipp Navratil works to revitalise the Swiss food group's fortunes.

Since his September appointment, Navratil has announced plans to cut 16,000 jobs and focused Nestle's portfolio on four major business areas. The company also plans to sell its remaining in-house ice cream business and is continuing efforts to offload its water and some vitamin brands.

The KitKat and Nescafe maker's new system for measuring performance increases the number of levels to six from three and increases the scope of potential financial rewards.

Employees attaining the highest, "exemplary" performance level could receive as much as 150% of their bonus target, up from a previous 130% limit. Those awarded an "unsatisfactory" rating will receive between 0% and 50% of the target, Nestle confirmed on Wednesday.

The company said the system simplifies performance evaluation, development planning and employee feedback. Bonus targets vary across teams.

Bloomberg News first reported the news on Wednesday.

Since Navratil's appointment, Nestle has been focused on improving its real internal growth (RIG) - or sales volumes growth - from the 0.8% level achieved in 2025.

"We have introduced a RIG gatekeeper into the bonus - this is a minimum level of RIG to be achieved," Navratil said when full-year results were announced last week, noting that bonuses for functional leaders were now linked to group performance to bring all teams behind one set of key performance indicators.

-Reporting by Alexander Marrow; editing by David Gaffen/Reuters