Frankfurt-listed shares in investment bank Lazard Ltd. (LAZ) slipped Monday following news that Chairman and Chief Executive Bruce Wasserstein has been taken ill.

The company said Wasserstein was hospitalized in serious condition with an irregular heartbeat "but he is stable and recovering."

A Lazard spokesman declined to comment further.

A Paris-based analyst said that the incapacity of any company's CEO is problematic but that in the Lazard case, where Wasserstein has stamped his personal mark on the company, his absence could be more troubling.

"It was really Wasserstein who fought to have Lazard listed and reshaped its business model and it is never good for a company when its head is out of action," the analyst said.

At 0723 GMT, Lazard shares were down EUR0.19, or 0.7%, at EUR28.16 in Frankfurt, underperforming the Stoxx Europe 600 banks index which was up slightly. Lazard shares in the U.S. closed Friday at $41.90.

Wasserstein, 61, has been Lazard's chairman and CEO since May 2005 and a director of Lazard Group since January 2002. He was brought in by former Lazard head Michel David-Weill to replace him as operational head of the business, but the two men were widely reported to have swiftly disagreed over strategy.

David-Weill, whose family helped found the bank over 150 years ago, reportedly objected to Wasserstein's investment policy, which involved recruiting topflight bankers such as Charles Ward, Michael Biondi, Jeffrey Rosen and Gary Parr, at a time when other investment banks were cutting back.

David-Weill was also reported to have opposed the 2005 Lazard initial public offering.

A former corporate lawyer, Wasserstein became co-head of investment banking at The First Boston Corp. before starting Wasserstein Perella Group Inc. with Joseph Perella in 1988. When Wasserstein Perella was sold to Dresdner Bank in 2001, he became executive chairman of Dresdner Kleinwort Wasserstein.

Lazard has weathered the financial crisis well, gaining market share from rivals. In the second quarter, the bank reported higher-than-expected profit as it expanded its restructuring and bankruptcy-advisory revenues and said the outlook for its traditional mergers-and-acquisitions business was brightening. Lazard also said it was increasing its quarterly dividend by 25% to 12.5 cents a share.

Lazard said during its second-quarter presentation that its advisory business has grown internationally. The bank moved up the ranks in the past year to become sixth for advising on the most global mergers and acquisitions deals at the end of the second quarter, according to Dealogic. Recently, Wasserstein has been a lead adviser to Kraft Foods Inc. (KFT) on its bid to takeover Cadbury PLC (CBY).

Kraft spokesman Michael Mitchell said Lazard remains its lead financial advisor and news of Wasserstein's illness won't affect the investment bank's role in the proposed offer for Cadbury.

Company Web site: http://www.lazard.com

-By Digby Larner, Dow Jones Newswires; +33 1 4017 1748; digby.larner@dowjones.com

(Ellen Sheng reported from Hong Kong.)