Martha Stewart to be paid millions after jail

Martha Stewart, the American home-making entrepreneur convicted in relation to an irregular share trade, could be paid more than $2m (£1.11m) a year when she is released from prison under a new five-year employment contract with her company.

The deal is a boost for Stewart, who must report to prison by 8 October after she said last week she wanted to serve her five-month sentence as soon as possible rather than waiting until an appeal into her case is heard.

Stewart was convicted earlier this year of four criminal counts in a fraud trial that centred on a suspicious share trade in the drug company ImClone Systems. Stewart was found to have lied to investigators about the share trade, but she was not charged with insider dealing. Martha Stewart Living Omnimedia (MSLO), which was founded by the domestic guru, has agreed to pay Stewart a salary of $900,000, plus a bonus of between 55 and 150 per cent of her basic pay. In 2003, Stewart received $900,000 in base salary, and a bonus of $500,000.

While Stewart is not dependent on the cash - she is already a multi-millionaire - the deal with the company which bears her name marks a vote of confidence after a rocky period.

Shares in MSLO have surged in recent days, bringing its value to almost $1bn, after it emerged that Stewart has also signed a deal with the reality TV expert Mark Burnett.

Stewart is thought to be working on a TV show with Mr Burnett, who masterminded the American version of Survivor and also The Apprentice, a programme which has captivated America and features Donald Trump putting young would-be businessmen and women through their paces.

One retail analyst said of Stewart, who must follow her five-month jail term with another five months of house arrest: "She will come back bigger than ever before. This is America."

Stewart made an impassioned speech last week when she revealed that she did not want to take up an offer from the court to stay out of prison until her appeal against the ImClone Systems ruling had been heard.

She said she wanted to put the "nightmare" behind her by serving the sentence straight away in what will probably be a low-security centre near her home in Connecticut.

In the meantime, she said she would miss her "two beloved, fun-loving dogs, my seven lively cats, my canaries, my horses".