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Profile: Stephen Hester

SO, WHAT do you give the man who has everything? If his name is Stephen Hester, the boss of RBS, the answer is easy: £9.7 million. That's the payout the banker stands to make if he can push the bank's share price up to 70p from its current position of 35p. A gift from a grateful nation, to be sure.

Given that the stricken bank is owned by the public purse, his pre-bonus salary of 1.2m makes Hester comfortably the best-paid public employee, well, ever. As for the stratospheric level of remuneration that would be triggered by hitting the right share price, it's a sum of government largesse that would be wildly unpopular in the country at large and would, if Hester is to be believed, even cause raised eyebrows back at the ranch.

"If you ask my mother and father about my pay they'd say it's too high," the 49-year-old told MPs last week. "So even people close to me have that view."

It's hardly surprising that his parents would find his salary and potential payout outlandish. They may live in a 750,000 stone cottage in a quaint North Yorkshire village, but his father is a semi-retired chemistry professor at the University of York and his mother is a psychotherapist. They are sufficiently grounded to have decided to dispatch their precocious son to Easingwold Comprehensive in North Yorkshire.

He inhabits a very different world these days, one in which 9.7m isn't a fortune, but a fair day's pay for a fair day's work. That's because his 19 years with Credit Suisse First Boston, where he became the company's youngest ever managing director at 35, not only left him with a skewed sense of financial perspective, but also left him an inordinately rich man.

As well as a 5.8m house in Holland Park, he is also the proud possessor of a ski chalet in the Swiss resort of Verbier and a 350-acre Oxfordshire estate, Broughton Grange.

That sprawling 7m Cotswolds pad has provided plenty of fodder for the tabloids after Sir Fred "The Shred" Goodwin went to ground and Hester stepped into his still-warm shoes. Within days of Hester assuming control at RBS, the nation's cash-strapped wage slaves were confronted with the uncomfortable image of the man who heads up the bank which they nominally control hosting a lavish hunt ball on his country estate. Hester insists that riding to the hounds of the Warwickshire Hunt, the outfit for which his Canadian-born former banker wife Barbara Abt is Master of Foxhounds, is just a case of marriage preservation, because "it's very important to keep our marriage together that I do the same as she does".

More recently, the estate has become famous for its horticultural overheads. Hester is a fellow of the Royal Botanical Society, and is more than a little keen on plants, as the Good Gardens Guide makes clear in its description of Broughton Grange ("one of the most significant and scintillating gardens created in Britain this century"). Even his parents might regard eight gardeners at 20,000 each a bit much, but who knows what they think about the turreted tree house or the arboretum containing the first five rare Australian Wollemi pines brought to Britain?

While Hester finds the media's interest in his personal life an unwelcome intrusion, he is not surprised by it. So why would a man who has enough money to give Croesus a run for his lolly want to put himself in harm's way if it's not for the money?

The dominant driving force is intellectual curiosity allied to a deeply competitive streak. He graduated from Oxford with a first in Philosophy, Politics and Economics, and ever since has been busy proving himself by taking on the biggest challenges that he can find. "If you are a footballer you want to play in the Champions League final," said the ardent Manchester United fan. "It's the same in business... you want to test yourself against the biggest and most complicated challenges."

Described by a former RBS colleague as "dynamic, sharp-witted, a brilliant strategic thinker… who leaves no one in any doubt as to what is expected of them", he has developed a reputation as a collegiate boss who empowers colleagues, a dramatic change from his predecessor. Not that he is completely unlike Goodwin: he also shares a taste for the good things in life, frequenting upmarket London restaurants like River Cafe and Locanda, driving around the city in his silver BMW X5 and taking regular safaris in South Africa.

He is a father of two and his list of hobbies and interests mark him out as someone with remarkable reservoirs of energy. A ski-mad, scuba-diving football fan who runs around Holland Park at 6am each morning, Hester is a physically big man who swims, rides, shoots, plays croquet and tennis and is a classic car enthusiast.

The accentless Yorkshireman who speaks softly but outspokenly and with a great deal of precision has also become used to success. Although John Mack, aka "The Knife", eventually ousted him at Credit Suisse First Boston (Mack says he wasn't a team player, Hester says he was a threat to Mack), he has been a success at both of his other main jobs.

After Abbey National lost 1bn in a single year, he rationalised the failing company and sold it off to Santander for 9bn.

Then he joined British Land, where his star rose following a series of astute acquisitions, with Hester getting out before his pre-recession prophecy that "I don't believe we're about to see a market decline" could be proved wrong.

Hester has the self-confidence of a man who is yet to fail, which is perhaps why he is willing to slash and burn companies that have got set in their ways.

Not that Hester is unwilling to pay the price of failure, taking the government on over the issue of bonus payments (although, contrary to reports, neither he nor the board ever threatened to resign over the issue). "Jobs like this are unbelievably stressful, leaving you open to unpleasant scrutiny," he says, "and there is a 50 per cent chance it ends in tears, because that is the way the world works. But, as they say, if you can't stand the heat, get out of the kitchen."

For now, however, the kitchen is toasty warm, and with that fortune in the oven and rising nicely, Hester isn't going anywhere for the time being.

&#149 A president of the Tory Reform Group at Oxford University, Hester has in the past donated money to the Conservative Party.

&#149 One of his first acts on becoming RBS boss was to ground the 17 million Falcon 900EX private jet used by Sir Fred Goodwin, right, for global travel.

&#149 Hester has lost two stone in weight since he joined RBS.

&#149 Hester once said that "people in banking will tell you that if someone wanted to hire a patsy then they wouldn't hire me" and set about proving it by questioning whether RBS had been politicised by its takeover by the government.

&#149 Hester was born in 1960 in Ithaca, New York.

&#149 Things he may wish he hadn't said before the recession: "I feel very positive about the development of the world economy and the dramatic power for good that globalisation and freer capital markets represent."

 
 
 

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