UPDATE 2-Lehman names Callan CFO; O'Meara to head risk mgmt

Thu Sep 20, 2007 5:32pm EDT

(New throughout, adds byline)

By Jonathan Stempel

NEW YORK, Sept 20 (Reuters) - Lehman Brothers Holdings Inc LEH.N, the Wall Street investment bank, named Erin Callan as chief financial officer on Thursday, replacing Christopher O'Meara, who will become global head of risk management.

Callan, 41, has worked at Lehman since 1995 and now oversees global hedge funds within the company's investment banking unit. She previously oversaw Lehman's global finance solutions and global finance analytics groups.

O'Meara, 46, has been CFO since December 2004. In his new role, he will oversee risk management policies and procedures, and monitor the company's risk appetite, trading limits and required capital. O'Meara joined Lehman in 1994.

Madelyn Antoncic, head of risk management for the last five years, will become global head of financial policy relations, a new position. Antoncic, 54, joined Lehman in 1999.

The changes are effective Dec. 1, with Callan joining Lehman's executive committee. Callan and O'Meara will report to Chief Executive Richard Fuld, Chief Operating Officer Joseph Gregory and Co-Chief Administrative Officer Ian Lowitt. Antoncic will report to Vice Chairman Thomas Russo.

"Madelyn Antoncic and Chris O'Meara are very strong managers," said Eileen Fahey, a managing director at Fitch Ratings in Chicago, who knows both executives. "O'Meara is very well-respected in the financial arena, and as CFO should know a lot about the products, their management and how to value them."

Fahey said she did not know Callan, but noted: "I would think her background in investment banking has prepared her to face the challenges as a CFO."

The three Lehman executives were unavailable for comment.

Morgan Stanley (MS.N), another Wall Street bank, is also installing a new CFO. Colm Kelleher, its global head of capital markets, will replace David Sidwell, who is retiring.

Lehman on Tuesday posted a 3.2 percent decline in fiscal third-quarter profit, a smaller drop than analysts expected, as it wrote down $700 million of mortgages and high-yield loans. It has announced 2,050 mortgage layoffs in the last five weeks.

O'Meara was listed as Lehman's fifth highest-paid employee in 2006, according to the company's Feb. 26 proxy filing. He is also listed among senior management on Lehman's Web site, while Antoncic and Callan are not.

"Because everyone is in-house, it doesn't look like an upheaval where someone is taking blame for problems Lehman has faced this year," said Peter Kovalski, who helps invest $12 billion at Alpine Woods Investments in Purchase, New York, and owns Lehman shares. "We'll see how it unfolds."

Shares of Lehman closed down $1.80 at $62.31 on the New York Stock Exchange. They have fallen 20.2 percent this year. (Additional reporting by Dan Wilchins)