Nov. 13 (Bloomberg) -- Bank of America Corp. should ask Chief Executive Officer Kenneth D. Lewis to delay his departure while the company conducts a longer search for a successor, analysts wrote to clients.

The bank, ranked No. 1 in the U.S. by assets and deposits, hasn’t found a new leader because a government “vendetta” against Lewis is driving off candidates, Richard Bove of Rochdale Securities LLC said in a note to clients dated yesterday. Bank of America should try to keep Lewis for another year “until a new CEO can be more carefully selected,” Michael Mayo of Calyon Securities USA Inc. wrote to investors today.

Bank of America is trying to find a new CEO before Lewis steps down on Dec. 31 after criticism by investors and regulators tied to the takeover of Merrill Lynch & Co. The Charlotte, North Carolina-based company has said it may name a successor by Nov. 26.

The U.S. wants an outsider to succeed Lewis and isn’t getting one because candidates “who have credibility can see no reason to take a post where they may be hounded to be government automatons,” Bove wrote. He cited the “frustrations” of Edward Liddy and Robert Benmosche, the two most recent CEOs at American International Group Inc., which is controlled by the U.S. after a taxpayer-funded bailout last year.

“An outside candidate must be willing to take a cut in salary; give up his or her independence in running the business; and subject themselves to congressional and press attacks,” wrote Bove, who recommends buying Bank of America shares.

Should ‘Compete’

Kenneth Feinberg, the Obama administration’s special master for executive compensation, said Bank of America should be able to “compete” for a chief executive.

“I’d like to think the determinations we made will allow them to compete,” Feinberg said today after speaking at an insurance conference in New York.

Feinberg ordered pay cuts averaging 50 percent for the top 25 executives at Bank of America, Citigroup Inc., American International Group and four other companies that took U.S. bailout money. He will rule on pay structures covering the next 75 highest-paid employees at those firms by year-end.

Feinberg said yesterday at the Bloomberg Washington Summit that he was “very cognizant” about the possibility that his pay cuts may drive talent away from companies bailed out by U.S. taxpayers.

Lewis ‘Obvious Candidate’

Any replacement will need “about five years to learn what Ken Lewis knows now about this company,” Bove said. “The obvious candidate for the job is Ken Lewis. Someone with authority should get him to change his mind.”

While Lewis, 62, is the person most responsible for overpaying on the Merrill Lynch takeover, he’s among the best at integrating operations, wrote Mayo, who rates Bank of America shares “underperform.”

Hampering the search process is “regulatory roulette or the uncertain influence and control that the government may have on the business,” Mayo wrote. “Under this scenario, why would any successful CEO want the job?”

Bank of America spokesman Scott Silvestri declined to comment in an e-mailed message.

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

Last Updated: November 13, 2009 13:00 EST