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Mary Berner, the bug-eating president and CEO of the Reader’s Digest Association, yesterday was pushed out of the top spot and was replaced by her one-time No. 2, the former Chief Financial Officer Tom Williams.
Berner’s booting follows a wholesale shuffle of the RDA board last week that initially spared Berner. However, a palace coup organized by four hedge funds that had grabbed control of the company, including Alden Global Capital and Point Lobos Capital Partners, led to her ouster.
Berner was famous for morale-building stunts, such as having top executives dress up as Santa’s elves at a 2010 party to spread good cheer after surviving an earlier pre-packaged bankruptcy — or for having top executives eat bugs in order to win an apple-dunking contest on Halloween.
Said one former exec: “It was bizarre and unprofessional.”
Peggy Northrop, global editor-in-chief of Reader’s Digest, a Berner backer, said of the bug eating: “It was all in good fun. I wouldn’t eat the bugs, and I was never penalized for it. It was like our own reality TV show.”
Berner yesterday owned up to the creepy crawler stunt, saying, “Yes, we did eat bugs. . .We did many team-building events over the years, and under no circumstances was anyone forced to do anything they were uncomfortable with.”
While the colorful stunts added a unique edge to her long publishing career, they had nothing to do with the announcement yesterday that she had left RDA. Apparently a clash of vision between Berner and Randall Curran, the new chairman of the board, and other board members, led to the split.
RDA, despite declining revenue, had managed to post strong profits in the latest fiscal year after emerging from bankruptcy in February 2010. Revenue was $554.7 million in the fourth quarter, down 6.8 percent from a year earlier.
Profit in the quarter was $58.5 million, compared to a loss of $26.7 million a year earlier. The company said for the coming fiscal year, it expected to post improved results, although it con ceded it did not expect to show revenue growth for some time.
Yesterday, following news of her departure, Berner said, “I am proud of the job we did. We got it back on track.”
But clearly there were storm clouds. Standard & Poor’s said that the flagship title, Reader’s Digest, “has declined because the brand and content have lost relevance to mainstream lifestyles and attitudes.”
Much of the attention of the new board is believed to have focused on Allrecipes.com, which was acquired by RDA in 2006, but grew to a dominant position in the foodie categroy during Berner’s tenure.
The board has a tech-heavy orientation and is expecting fast growth. At the end of the day, as one source said, “It was clear that they did not want [Berner] and she did not want them.” kkelly@nypost.com