Swiss Food Giant Nestle Overhauls Bonus System to Reward Top Performers

Nestle has rolled out a revamped performance evaluation system that significantly increases bonuses for star employees while reducing or eliminating rewards for poor performers. The changes come as new CEO Philipp Navratil works to turn around the Swiss food company's struggling performance.

The Swiss food giant behind popular brands like KitKat and Nescafe has unveiled a major overhaul of its employee compensation system, creating bigger financial incentives for top performers while offering minimal rewards to workers who fail to meet expectations.

Nestle announced Wednesday that it has expanded its performance rating structure from three tiers to six levels, with the potential for dramatically different bonus payouts depending on employee performance. Workers who achieve “exemplary” ratings could earn up to 150% of their target bonus amount, while those receiving “unsatisfactory” marks will see their bonuses cut to between zero and 50% of their goals.

The restructuring represents part of CEO Philipp Navratil’s broader effort to revitalize the company since taking the helm in September. Navratil has already announced plans to eliminate 16,000 positions and streamline operations around four core business segments. The company is also working to divest its remaining internal ice cream operations and shed its water and certain vitamin product lines.

According to Nestle, the expanded rating system is designed to make performance reviews more straightforward while improving how the company plans employee development and provides feedback. Bonus targets differ between various teams throughout the organization.

The company has been working to boost what it calls real internal growth – essentially sales volume increases – from the modest 0.8% rate recorded in 2025. Navratil explained during last week’s annual results presentation that the company has built minimum growth requirements into its bonus structure.

“We have introduced a RIG gatekeeper into the bonus — this is a minimum level of RIG to be achieved,” Navratil stated, adding that leadership bonuses are now tied to overall company performance to align all departments around shared success metrics.