A Sad Story at the Digest

A legacy of generosity and stodginess is clashing with Wall Street's calls for better performance

Things are really nasty in Pleasantville these days. The Reader's Digest Association, best known for its pocket-size magazine, is in a state of protracted turmoil. The sputtering 76-year-old publisher founded to "inform, enrich, entertain and inspire people" has lately just incited a group of big-game-hunting shareholders, who want to see the Digest company restructured or sold. "This is a company that has been asleep," says Nell Minow, a principal of Lens, an activist Washington-based money manager with a substantial stake in the firm. "We are trying to bring them into the 20th century before we get to the 21st."

In the...

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