Blackstone has replaced its chief financial officer with a top executive poached from Merrill Lynch. Laurence Tosi, who has been at Merrill for nine years and most recently was the chief operating officer of its investment banking division, will replace Michael Puglisi, a 14 year Blackstone vet.

The move by Tosi is being read by the cynical in two ways. First, it may be a sign that internal friction among the top executives at Merrill continues. Following the resignation of Stanley O'Neal, who appointed Tosi to his spot, and the rise of John Thain, there was lots of talk of internal wrangling at the bank. Lately the internal situation has quieted as executives adjusted to new leadership. But a high-level defection is sure to re-ignite whispers of internal dissent.

The second cynical read of the move highlights a structural change on Wall Street. As investment banks and brokerages lower leverage and come under deeper regulatory scrutiny, the relative power and profitability of alternative investment houses like Blackstone is sure to rise. Could Tosi's move be further evidence of the coming decline of traditional investment banks and the ascendancy of the increasingly hybrid Blackstone, which many describe as a budding investment bank disguised as a buyout shop?

Or, you know, may he just wanted a new job and more money. But, as Nick Walker says in one of our favorite movies, "It would be better if it meant something."

Blackstone appoints new CFO [Reuters]

Nearly one-fifth of US chief executive officers in 2005 were formerly chief financial officers, a doubling of the percentage from the prior decade. The Economist explains the changing make-up of CEOS--more women, shorter tenures--but it leads with the rise of the financial professional, which seems to be caused largely by regulatory changes such as Sarbanes-Oxley and increased financial disclosure requirements.

Perhaps surprisingly, Wall Street is bucking this trend. Although CFOs such as Gary Crittenden, Zoe Cruz and Erin Callan often get talked about as successors to the top spot at their respective banks, they more often get passed over. Of Wall Street's current chiefs, only John Thain, now the head of Merrill Lynch, served as chief financial officer (when he was at Goldman Sachs). This could be because years of Wall Street experience involve enough hands-on finance regardless of what position a senior executive takes, making the CFO experience superfluous. Or maybe Wall Street is still trapped in a pattern other US companies broke out of a year ago.

How to get to the top [The Economist]

The Wall Street Journal ran a profile over the weekend of Erin Callan, the 42-year old chief financial officer of Lehman Brothers, just in time for the six months semi-versary of her promotion to the c-suite. Many on Wall Street were skeptical of Callan stepping into the role. She started out with several strikes against her: she started her career as a lawyer, she has very little formal hardcore financial accounting experience and her frequent appearances on television had led many to suspect she was more of an extremely well-paid spokesperson than a hands-on executive. Oh, and there's this whole women-on-Wall Street thing too.

More after the jump.

Details are emerging about the May resignation of WellPoint CFO David Colby. Colby was forced to resign after his 10 year stint by WellPoint Chairman, President, Secretary of the Exchequer, CEO, and Grand Poobah Larry Glasscock for violating the company’s code of conduct.

The Colbinator was a pretty big deal in the managed care sector, named the best managed care CFO in America in 2006 for the third year in a row by an Institutional Investor survey of portfolio managers and equity research analysts. He was pulling down $740k a year and just had another $1.6mm of options lumped on his equity plan (and he got quite a nice sum from the $200mm executive bonus pool up for grabs after the WellPoint/Anthem deal).

WellPoint won't comment on Colby’s specific conduct violations, but let's just say Colby's lifestyle was a bit "alternative." The life of David Colby included jetting around, housing, and proposing to a number of women during his tenure as CFO. If you ever wondered how it’s possible to cheat on a mistress, look no further than David Colby.

Up until last week, Colby was engaged to two women, and not yet divorced from his second wife. Aside from the two fiances and second wife, Colby was housing another women, Rita DiCarlo, in his 7,500 sq. ft. Lake Sherwood house. Rita had been shacking up in the ColbyDome for almost 2 years while driving around Colby’s 1998 Jag with C(heart)LBY vanity plates (that’s not a joke). She’s now suing Colby for the house.

Colby wasn’t shy when it came to sweeping 20-something WellPoint employees off their feet, from the Los Angeles Times:

Sarah Waugh said she met Colby in 1998 when she was a 22-year-old temporary worker at WellPoint's offices in Thousand Oaks, where she later landed a permanent job. Their romantic liaison began at a company party at the Westin Bonaventure in downtown Los Angeles in early 2001, she said, where she felt "like quite a big deal" because Colby danced with her.

Wife #1 divorced Colby after finding out about 2 extramarital affairs. Wife #2 won’t comment as to why she wants to take herself private.

Although WellPoint doesn’t hate the player, it hates the game, which included jetting the women around on business trips (although WellPoint comments that company money was not used for Colby's business travel companions).

Wayne DeVeydt took over for Colby as CFO and Angela Braly took over as CEO for Glasscock in some unrelated managerial shuffling on June 1. Glasscock retains the rest of his WellPoint positions.

Women claim lives with WellPoint exec [Los Angeles Times]
WellPoint CFO David Colby Ousted On Conduct Violation; Wayne DeVeydt Named New CFO [ RTT News]

Charles Schwab announced today that its Chief Financial Officer, Christopher Dodds, will be retiring, effective May 18. Dodds, who’s been with the company since 1986 (and CFO since ’99), will be succeeded by Senior VP and Treasurer Joseph Martinetto. Sandler O’Neill analyst Richard Repetto commented today that “we believe Mr. Dodds had been a candidate to succeed Chuck Schwab…as CEO.” Dodds—known to friends as never being able to resist a trend (skinny jeans, black nail polish, cutting, etc)—today joins a long line of CFOs who hate their jobs.

Charles Schwab CFO to retire soon [Fortune]

Are you a CFO? Do you hate your job? Do you hate your job? Then you must be a CFO. (That's right, a little commutative property at work here @ the DB HQs. We took honors math, no big deal...). No longer relegated to merely dentists, Cornell students and Enron CEOs, “Occupations with the Highest Rate of Suicide” now count CFO as one of its darlings.** Apparently being a Chief Financial Officer translates to all of the sweat and none of the glory, meaning you’re more likely to be working late nights at your desk than blowing coke off of a hooker’s breasts. No wonder, then, that BofA’s Alvaro De Molina, Citi’s Sallie Krawcheck, and at least 12 other CFOs wanted out of the position over the last year. Who’s to blame? According to Fortune’s Telis Demos, for the most part, the SEC.

In today's Sarbanes-Oxley world, the chief financial officer post - once a finishing school for future CEOs - has become the crummiest gig in the corporate suite. Combine the workload necessary to comply with the controversial 2002 legislation and the knowledge that you're almost certainly the sacrificial lamb if the SEC comes calling, and it's a recipe for skyrocketing turnover.

Companies with a market cap of at least $1 billion changed CFOs three times more often in 2005 than in 2002, according to 10k Wizard. And while the rate of exits slowed a bit at big companies last year, Richard Jacovitz of liberum Research found that among public companies of all sizes, CFO exits increased from 1,867 in 2005 to 2,302 in 2006.

SarbOx has forced CFOs to spend nearly a third of their time on IT systems, paperwork, and tedious board inquiries rather than on the big picture, say headhunters and former executives. That's in addition to typical responsibilities like communicating with Wall Street and dealing with creditors.

The situation is now allegedly so bad that companies are turning to temps.

Doesn't anyone want to be a CFO anymore? [Fortune]

*Seemed more legit than "CFOs: The Only Absentees In The Coke Den"
**Or should, considering the evidence.

Yesterday’s guilty plea by the former chief financial officer of Comverse Technology may help shed some light on the government’s view of criminal liability for backdating stock options. David Kreinberg is the first executive to plead guilty to backdating charges.

When the backdating scandal first broke, many observers assumed that the government would focus its attention on executives who engaged in secretive self-dealing by granting themselves in the money stock options dated to appear as if they had been granted at an earlier date. In other words, many assumed criminal liability would arise from executives who had inflated their own compensation and while hiding the real value of their options from shareholders.

And many companies who have disclosed their own backdating practices have gone out of the way to point out that the individuals approving the stock options did not directly benefit from the grants. The most prominent case of this is probably Apple, which said its CEO, Steve Jobs, "did not receive or otherwise benefit from any of the improperly granted stock options."

But that’s not what the government is focused on in the Comverse backdating investigation.

Prosecutors claim the three men backdated stock option grants so employees could buy shares at low prices and make the maximum profit, prosecutors said. Stock options typically give an employee the right to buy a specified number of company shares at the market price on the option grant date.

Which means that federal prosecutors are not restricting their view of criminal liability for backdating to self-dealing executives. They are going after the Comverse executives for creating backdated options intended to address what Kreinberg calls “employee retention and recruitment challenges.”

Uhm, Steve Jobs, call your lawyer.

Comverse Ex-CFO Names Jacob Alexander in Guilty Plea [Bloomberg]

An Illinois-based company needs a CFO with 7 to 10 years of senior management experience in international finance. And, oh yeah, Jesus has to be your favorite management guru.

Qualifications include being a Christian, having a personal relationship with Jesus Christ and also agree with the Bible League’s Statement of Faith.

Turns out that under Title VII, religious institutions are exempt from certain federal laws covering religious discrimination. We’re not sure exactly what qualifies as an exempt religious institution but the folks hiring here—the “Bible League”—sure sound like good candidates.

CFO Careers [CFO.Com]