Rolls-Royce names Daily Mail's Stephen Daintith as new CFO

* CFO David Smith to leave in 2017 after around three years in job

* CEO praises Daintith's experience in "change management"

* Shares (Berlin: DI6.BE - news) rise 1.5 pct, recovering earlier losses (Adds share price, analyst comment, background)

By Sarah Young

LONDON, Sept 22 (Reuters) - Britain's Rolls-Royce named Stephen Daintith as its new finance officer on Thursday as CEO Warren East completed a shake-up of his senior executive team tasked with turning around the aerospace and defence company.

Daintith, who is currently CFO at Daily Mail and General Trust, will replace David Smith in 2017, Rolls-Royce said in a statement on Thursday.

Daintith will join Rolls as East, who took the reins in July 2015, tries to streamline the company after difficulties in its aero-engine and marine businesses mean that profit is expected to halve this year.

Smith was appointed by East's predecessor John Rishton in 2014 and will leave Rolls-Royce to pursue other business interests, the company said.

Daintith, 52, is Rolls-Royce's second top management appointment in as many weeks, after the company said earlier in September that British high-speed rail boss Simon Kirby would be its new chief operating officer.

Shares in Rolls traded up 1.5 percent to 737 pence at 1208 GMT, recovering earlier losses of as much as 2 percent.

An analyst who declined to be named said Smith's going was not a huge surprise.

"David was never Warren's hand-picked guy for the job. Warren's got a massive job on his hands to transform Rolls, he needs to make sure his immediate team he's got 110 percent confidence in them being the right people," the analyst said.

But some analysts said that the departure of Smith, who was appointed in November 2014, was a surprise, given that he has been credited with some of the success of the turnaround so far, raising doubts about Rolls being on a more stable footing.

"It's one of those things where people were of the view where we were getting to more of a steady state situation," Barclays (LSE: BARC.L - news) analyst Phil Buller said.

Daintith, at the Daily Mail publisher since 2011, having previously been CFO of Times publisher News International, will now be responsible for the finances of Britain's pre-eminent engineering company.

Rolls has already started a process of preparing investors for a transition to new accounting system, IFRS 15, in 2018.

CEO East said in the statement that Daintith's record of achievement in "change management" would be particularly relevant to Rolls-Royce.

A spokesman for Rolls-Royce said that the company was also in the process of recruiting a director of strategy and marketing and another person to strengthen its digital capabilities.

Daintith will be paid an annual salary of 680,000 pounds ($888,284) at Rolls-Royce plus a potential performance share award of 225 percent of his salary. ($1 = 0.7655 pounds) (Reporting by Sarah Young, editing by James Davey and Elaine Hardcastle)