) --

Bank of America

(BAC) - Get Report

has picked a front-runner to take the CEO spot, but compensation questions are holding up an agreement, a report says.


Wall Street Journal

reported on Friday that

Bank of New York Mellon

(BK) - Get Report

CEO Robert Kelly told directors of his bank he was in discussions to replace the departing Ken Lewis for the top job at Bank of America.

Kelly's status as the leading candidate hasn't changed. But negotiations between Bank of America and Kelly are fluid, with a person close to Kelly saying it might not be possible for the parties to reach a deal.

Kelly officially hasn't been offered the CEO job at Bank of America. But the differences between he and the bank are "down to compensation now," and "if they can reach some level of comfort around compensation, he will take it," this person said, the



Last week, Bank of America announced it has completed

paying back

the $45 billion it received under the U.S. government's Troubled Asset Relief Program. Part of the reason for paying back TARP was the bank's goal to free itself from government restrictions on executive pay.

Kelly had said previously that he wasn't interested in the Bank of America job. He was approached for the job in October.

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-- Reported by Joseph Woelfel in New York.

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