WHSmith chief executive Kate Swann has been offered a new three-year pay deal, which could earn her up to £5 million in the next three years.

Swann could earn£3.78 million in shares, as well as her£504,000 annual salary. The scheme will be voted on by shareholders at the retailer’s AGM in January.

Swann has revived WHSmith’s fortunes in recent years. And, if she accepts the new deal, it could end speculation about her future – she would have to invest a year's salary in WHSmith’s shares to qualify for the payout. Swann is already in line to collect a£3 million bonus in February. A further 40 senior managers are expected to share about£9 million.

Pali international analyst Nick Bubb said: “Investors have been nervous that Kate Swann will walk away in early 2008 with her first three-year reward and get a new job. It is not a mega-incentive, but it is clearly a very useful one.”

Last month, the retailer reported soaring group profits, but like-for-like sales dropped. Group pre-tax profits in the year to August 31 were£76 million – up from£44 million last year.