Bookseller and stationer WHSmith’s board revealed on Tuesday just how much they value the services of chief executive Kate Swann.

They are so keen to retain her that they have dangled a£5 million carrot before her, providing she stays until late 2010 when the rewards would be realisable.

Will Swann take the bait? The scheme was drawn up, the retailer said in its annual report, “following concerns that had been raised by some of the company’s major shareholders regarding retention of the current management team”, after the existing scheme vests.

Given such jitters, which are indicative of the high esteem in which Swann and her colleagues are held by investors, the new scheme has presumably been drawn up on lines likely to be acceptable to WHSmith’s senior team.

But the board has imposed taxing conditions on a full pay-out. In order to make£5 million, Swann needs to deliver earnings per share growth of a compound 15 per cent a year and ensure that WHSmith’s share performance is in the top 15 among general retailers. It’s no easy ask, despite Swann’s impressive track record to date.

That track record has made Swann one of the top contenders for many of retail’s plum roles, whether at a private equity-backed or publicly quoted store group. Might not either manage to come up with a more attractive scheme for Swann? Richard Baker, for instance, made more than£6 million from the sale of Alliance Boots to KKR.

And departing Kingfisher chief executive Gerry Murphy – to whose job Swann has been linked – will walk off next year with as much as£2.25 million, despite a mixed record.

The WHSmith board has been right to set a real challenge and Swann could well meet it. But now that the details of her reward scheme are out, other retailers are looking at how they can better it.

Better times at Morrisons?

Morrisons was due to update as Retail Week went to press and, ahead of the numbers, excitement is building.

For once, it wasn’t about property and whether the food group might be a bid target. Instead, there was a sense that Morrisons is on the up, prompting a flurry of bullish notes.

Changes wrought by chief executive Marc Bolland look as if they’re bearing fruit. Who said that the grocery sector is uncompetitive?

George MacDonald is deputy editor of Retail Week