Nestle has introduced a stricter performance and bonus framework that increases rewards for top staff while cutting payouts for underperformers, as chief executive Philipp Navratil presses ahead with a sweeping turnaround of the Swiss food group.
The maker of KitKat and Nescafe confirmed on Wednesday that it has expanded its employee rating system from three levels to six. According to Reuters, the change allows staff rated “exemplary” to earn up to 150% of their bonus target, while those classified as “unsatisfactory” will receive between 0% and 50%.
The move materially widens the gap between high and low performers, reinforcing a sharper focus on accountability at a time of restructuring.
Nestle said the revised structure is designed to simplify performance evaluation, development planning and feedback processes. Bonus targets vary across teams.
Bloomberg first reported the changes.
The overhaul forms part of a broader transformation under Navratil, who took charge in September. Since then, he has announced plans to cut 16,000 jobs and streamline Nestle’s portfolio into four core business areas. The group is also pursuing the sale of its remaining in-house ice cream business and continuing efforts to divest parts of its water and vitamins operations, Reuters reported.
A central objective of the strategy is to lift “real internal growth” (RIG), Nestle’s measure of sales volume growth. The company posted RIG of just 0.8% in 2025, underscoring sluggish demand across key markets.
“We have introduced a RIG gatekeeper into the bonus — this is a minimum level of RIG to be achieved,” Navratil said during last week’s full-year results, according to Reuters. He added that bonuses for functional leaders are now tied more closely to overall group performance, aligning teams around a common set of targets.
Linking incentives directly to sales growth signals a tougher performance culture at a company long associated with steady, incremental expansion rather than aggressive restructuring.
Nestle operates in an increasingly competitive consumer goods market, where pricing power has come under pressure and shoppers are trading down in response to inflation. Investors have pushed management to restore volume growth while protecting margins.
The revised bonus framework suggests Nestle is using pay structures to drive faster execution and tighter cost control. As portfolio reshaping and job reductions progress, the effectiveness of the tougher performance regime will be tested against the company’s ability to lift sales volumes in the coming quarters.