Lehman Sends Top Brass Packing

The stock's slide Thursday could have been worse, but for comments from former AIG(AIG Quote) chief Maurice "Hank" Greenberg, who said he still planned to buy Lehman shares, in line with earlier statements, despite the expected loss.

Investors fear that Lehman's troubles could make it the next Bear Stearns, which in March, on the verge of bankruptcy after rumors about its liquidity hammered the stock, sold itself to JPMorgan Chase(JPM Quote). Bear shareholders approved the deal last month.

UBS analyst Glenn Schorr characterized the executive shake-up as "part of the healing process" in a note Thursday, but added that "they don't change the difficult operating environment and the challenges facing Lehman given its remaining risk exposures (and respective marks)."

Lehman still maintains an estimated $60 billion worth of real-estate exposure, according to a recent report from Merrill Lynch analyst Guy Moszkowski.

Schorr also called McDade "very well respected internally and externally." He added that the transition should be "smooth" with "plenty of support in place" since Callan and her two immediate predecessors, Chris O'Meara and Dave Goldfarb, are still at the firm.

Callan was one of the highest ranking female executives on Wall Street who previously launched and headed Lehman's hedge-fund business. She joined Lehman in 1995 after working with the firm as an attorney with Simpson Thacher & Bartlett. She did not have an accounting background or experience in overseeing a large investment bank's finances.

Still, Callan's fall has been precipitous. She was widely lauded for her stewardship of the firm earlier this year, when it was regarded as one of the few Wall Street firms to navigate the credit crisis relatively unscathed. But recently, she was assailed by hedge-fund manager David Einhorn of Greenlight Capital for masking losses.