BOSTON -- Thanks to some give-and-take from both sides on compensation issues, moderate progress was made yesterday in contract talks between the Red Sox and general manager Theo Epstein.

Epstein's current three-year deal expires Monday, creating a sense of urgency for the general manager and the organization. Expectations are that talks will either be successfully resolved or abandoned altogether by the end of the week.

The discussions that took place yesterday were the first in almost a week between the two sides. Even as the gap narrowed some in terms of salary, there are still significant philosophical issues to resolve between Epstein and ownership that must be overcome for a deal to be struck.

Throughout baseball, there has been speculation that principal owner John Henry and chairman Tom Werner might soon involve themselves in the talks, which to date have been handled exclusively by CEO Larry Lucchino.

It was unclear whether Henry or Werner participated in the discussions yesterday.

Epstein has been seeking a multi-year deal near the top of the general manager pay scale. Industry sources indicated yesterday that Brian Cashman has agreed to remain with the New York Yankees for an annual salary of approximately $1.75 million plus additional bonuses, making him the highest-paid general manager in the game without additional executive duties. Dave Dombrowski of the Detroit Tigers is the game's highest paid GM, but he doubles as president of the Tigers.

Cashman's new deal may serve as something of a guidepost for Epstein and the Red Sox. Last week, the Red Sox offered Epstein a three-year deal worth $3.3 million, which was rejected.

Red Sox ownership's five-year, $12.5 million deal offer to Oakland A's GM Billy Beane three years ago -- which Beane accepted for a period of 24 hours before changing his mind and paving the way for Epstein's promotion to the job -- continues to impact the negotiations, with ownership maintaining it has little relevance to the talks and Epstein arguing otherwise.

The climax of the Epstein negotiations come as Red Sox assistant general manager Josh Byrnes has emerged as the leading candidate to become GM of the Arizona Diamondbacks.

Byrnes, who was hired by Epstein, has interviewed twice for the position and appears to have emerged as the favorite over current San Diego Padres general manager Kevin Towers.

Byrnes had worked for the Colorado Rockies and Cleveland Indians before joining the Sox.

Should Byrnes depart, it would leave the Red Sox without an in-house candidate to promote should talks dissolve with Epstein.