Bank of America Loses Top Choice for CEO

CHARLOTTE, N.C. (TheStreet) -- Bank of America's (BAC) talks to hire Robert Kelly, chief of Bank of New York Mellon(BK), as its next CEO, have collapsed.

The talks ended over pay and governance issues, the Wall Street Journal reports, citing people familiar with the matter.

Even after Bank of America paid back $45 billion of bailout funds it received from the U.S. government, freeing it from compensation limits, Bank of America's board and Kelly couldn't reach an agreement on pay, according to the Journal. Kelly asked for a pay package of more than $20 million, the paper says.

Kelly also raised the possibility of moving Bank of America's headquarters to New York and becoming chairman, as well as CEO. But shareholders voted last spring to separate the bank's chairman and CEO duties, therefore nixing Kelly's suggestion and giving him another reason not to take the job, said a person close to Kelly's thinking, the Journal reports. .

A Bank of New York Mellon spokesman told the Journal that pay was "at the bottom of the list" for Kelly. "Mr. Kelly was very flexible on compensation," he said. "The more important drivers of his decision were the strategic opportunities for growth at BNY Mellon."

With Kelly now out of the picture, two internal candidates -- Chief Risk Officer Gregory Curl or Brian Moynihan, president of consumer and small business banking -- have moved back to the top of the list to take over the CEO duties of the departing Ken Lewis.

Bank of America's CEO search committee met Monday by phone to discuss the situation and is expected to make a decision whether to go with an insider in the next day or two, said a person close to the process. No other outside candidate is currently under consideration, this person said, the Journal reports.