The double world champion is currently paid an annual salary of around £20 million. Negotiations have been slow as he seeks to compete with the best paid drivers in Formula One. Sebastian Vettel is currently the benchmark, earning €50 million (£37 million) at Ferrari.
The two-time world champion is hoping to seal the new deal very soon
After splitting with Simon Fuller’s XIX Entertainment management company, Hamilton has also been conducting the talks himself with only the help of his in-house lawyer. They began last season, but were postponed around the time of the Russian Grand Prix in October with his title duel with team-mate Nico Rosberg reaching its climax.
Both Hamilton and Mercedes are in a very strong position. The Briton emphatically won the season-opening Australian Grand Prix while the team proved they have the best car in the sport by some distance.
There has been hope in some quarters that Hamilton may take the risk of leaving Mercedes and join Ferrari, to pit himself against Vettel. The Ferrari president, Sergio Marchionne, is a big admirer of Hamilton, but the chances of a move away from Mercedes appear slim.