Nestle puts pressure on underachievers with new bonus structure

Core Viewpoint - Nestle has implemented a new performance measurement system that rewards high achievers with increased bonuses while providing minimal rewards for underperformers, as part of CEO Philipp Navratil's strategy to enhance the company's performance [1][2]. Group 1: Performance Measurement Changes - The new system increases the performance levels from three to six, expanding the potential financial rewards for employees [2]. - Employees achieving the highest "exemplary" performance level can now receive bonuses up to 150% of their target, an increase from the previous cap of 130% [3]. - Those rated as "unsatisfactory" will receive between 0% and 50% of their bonus target, reflecting a significant shift in the bonus structure [3]. Group 2: Strategic Focus and Job Cuts - Since Navratil's appointment, Nestle has announced plans to cut 16,000 jobs and is concentrating its portfolio on four major business areas [2]. - The company intends to divest its remaining in-house ice cream business and is actively working to sell off its water and some vitamin brands [2]. Group 3: Linking Bonuses to Performance Metrics - The new bonus system incorporates a "RIG gatekeeper," which sets a minimum level of real internal growth (RIG) that must be achieved for bonuses to be awarded [4]. - Bonuses for functional leaders are now tied to group performance, aligning all teams with a unified set of key performance indicators [4].