Bank of New York Mellon Corp. chief executive Robert Kelly told employees he isn't leaving to take the top job at Bank of America Corp., according to a memo reviewed by The Wall Street Journal.

"I wanted you to know — and to hear from me directly — that I'm not leaving BNY Mellon and I look forward to working with all of you to make this great company even stronger," Kelly wrote in the memo, sent Monday afternoon to employees at the New York company.

The 55-year-old Kelly had emerged over the weekend as the front-runner to succeed Kenneth Lewis, who is set to retire at year-end, according to people familiar with the situation. But the two sides were locked in negotiations over his compensation, these people said.

The outcome of the pay discussions isn't known. Kelly also had raised the possibility of moving Bank of America's headquarters to New York and becoming chairman.

Bank of America's board has been reluctant to move the company out of its longtime hometown, where it is a major employer and synonymous with Charlotte's economic rise over the past two decades. Shareholders voted last spring to separate the chairman and CEO duties at Bank of America.

According to a person familiar with the matter, Kelly told Bank of New York Mellon directors earlier Monday about his decision.

In the memo, Kelly didn't specifically mention Bank of America, referring only to "another bank" that approached him "as part of their CEO search process."

"It's not opportunity that I sought," he wrote in the memo. "After talking with them, I firmly concluded that my place is here at BNY Mellon."

Kelly's decision to stay where he is throws yet another wrench into the succession process at Bank of America, the largest U.S. bank as measured in assets.

Until last week, it looked likely that the top job would be offered to Bank of America Chief Risk Officer Gregory Curl or Brian Moynihan, president of consumer and small-business banking.

As of Monday, Curl and Moynihan hadn't been ruled out, said a person familiar with the situation. That gives Bank of America alternatives now that the discussions with Kelly have fallen apart.

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