What a remco actually decides
Four things, and they are more specific than most founders expect. The remuneration policy for executives, meaning the framework the whole thing hangs off. The individual packages for the CEO and the executive team, including base, short-term incentive and equity. The performance measures that trigger variable pay. And the equity plan itself: pool size, grant sizing, vesting and what happens on an exit.
In an ASX-listed company it also owns the remuneration report that goes into the annual report and gets voted on by shareholders. In a private company nothing is disclosed publicly, but the committee's job is the same, and the discipline is arguably more valuable because there is no external check on it.
| What a remco owns | Why it matters to a scale-up | |
|---|---|---|
| Remuneration policy | The framework executive pay hangs off | Stops every executive hire being negotiated from first principles, which is what makes offers slow and inconsistent. |
| Executive packages | Base, short-term incentive and equity per person | Gives a candidate a clean counterparty, and gives the founder a defensible position rather than an ad hoc number. |
| Performance measures | What triggers variable pay | Set before the hire, not after. Measures agreed in the offer are the ones that actually drive behaviour in the first year. |
| The equity plan | Pool, grant sizing, vesting, exit treatment | The single largest lever on a senior finance offer, and the one most often presented badly. |
When a VC-backed business should form one
The practical trigger is not a headcount number, it is the first time executive pay stops being a founder decision. That usually happens around the first proper executive hire, when an investor director joins the board, or when the option pool needs a policy rather than a case by case call. Startups typically consider their first finance or CFO hire from the Seed, Series A or Series B rounds.[1] By Series B a remco is normal.
Forming one early is cheap. Two or three directors, usually including an investor director and an independent, meeting a few times a year with a written charter. Forming one late is expensive, because you discover you need it in the middle of a live offer to a candidate who is also negotiating elsewhere.
What it means for hiring your CFO
This is the part that touches my work directly. When there is no remco, the CFO offer gets built from scratch by whoever is in the room, which slows everything down. Story's benchmark from job brief to shortlist presentation is five working days, and from brief to contract signing fifteen working days.[2] Governance gaps at the offer stage are one of the reliable ways to blow through that.
A remco also removes a specific awkwardness. The CFO is often the person who prepares the pay analysis for the board, and they cannot be the person setting their own package. Someone else has to own that, and when nobody does, the conversation drifts. A functioning committee gives the candidate a clean counterparty and gives the founder a defensible position.
The bands the committee should be working against, in Australian high-growth businesses in 2026, are $180k to $240k plus equity for a VP or Head of Finance, $275k to $325k plus equity for a CFO at late Series A, $325k to $375k at Series B, and $350k to $500k and up at Series C or pre-IPO with the package increasingly weighted to equity.[3]
The full Australian finance leadership bands by role and funding stage are set out here.
Getting the equity part right
This is where most remcos in early-stage businesses under-perform, and the fix is presentation as much as policy. Equity presented as a percentage on a page means almost nothing to a candidate who cannot see what it converts to. The version that lands is a table of economic outcomes tied to the grant structure: what the candidate walks away with across a range of exits, from a zero outcome up to a large one.
Structure matters too. Under the ATO Employee Share Scheme startup concessions, where structured correctly, the taxing point on equity can be deferred to the eventual sale, so an employee is not taxed on paper gains before they have the cash to pay the bill.[4] A senior finance candidate will run that maths anyway. A committee that has already run it signals competence, and a mid-range cash offer with well-framed equity beats a higher cash offer with a vague one.
Who should sit on it
Keep it small and keep the CEO off the vote on their own package. Typically an independent or non-executive director chairing, an investor director, and the CEO attending for everything except their own remuneration. The CFO or Head of People supports it with data and does not vote.
Be aware that this is the committee most exposed to a change at the top. When a new leader steps in, the entire philosophy of the business shifts, with real consequences for risk appetite, performance expectations, headcount decisions and how the CFO engages with the executive team.[5] The remuneration framework is where those shifts get formalised, so a written charter and documented decisions are worth the small amount of effort they cost.
If you are benchmarking the executive team more broadly, how CEO and executive pay is structured in Australia is covered here.
Common questions
What does remco stand for?
Remuneration committee, a subcommittee of the board that sets and reviews executive pay. It owns the remuneration policy, the individual packages for the CEO and executive team covering base, short-term incentive and equity, the performance measures that trigger variable pay, and the equity plan including pool size, grant sizing, vesting and exit treatment. In an ASX-listed company it also owns the remuneration report that shareholders vote on at the AGM.
When should a startup form a remuneration committee?
The trigger is not headcount, it is the first time executive pay stops being a founder decision. That is usually the first proper executive hire, an investor director joining the board, or the option pool needing a policy rather than case by case calls. Startups typically consider their first finance or CFO hire from the Seed, Series A or Series B rounds, and by Series B a remco is normal. Forming one early is cheap. Forming one during a live executive offer is not.
Who should sit on a remco?
Keep it small. Typically an independent or non-executive director as chair, an investor director, and the CEO attending for everything except their own remuneration. The CFO or Head of People supports the committee with data and does not vote. The reason the CEO steps out is the same reason the CFO cannot set their own package: the person preparing the analysis should not be the person approving their own outcome.
How should a remco present equity to a senior finance candidate?
As a table of economic outcomes tied to the grant structure, showing what the candidate walks away with across a range of exits from zero up to a large outcome. A percentage on a page means little to someone who cannot see what it converts to. Structure matters too: under the ATO Employee Share Scheme startup concessions, where structured correctly, the taxing point can be deferred to the eventual sale so the employee is not taxed on paper gains. A mid-range cash offer with well-framed equity beats a higher cash offer with a vague one.
References
- Tom Hunter on timing: startups typically consider making their first finance or CFO hire from the Seed, Series A or Series B funding rounds.
- Story Recruitment internal benchmarks: 5 working days from job brief to shortlist presentation, and an average of 15 working days from brief to contract signing.
- Story Recruitment 2026 finance leadership salary bands: VP / Head of Finance $180-240k plus equity, late Series A CFO $275-325k, Series B CFO $325-375k, Series C+ / pre-IPO CFO $350-500k+ weighted to equity.
- ATO Employee Share Scheme startup concessions: where structured correctly, the taxing point on equity can be deferred to the eventual sale.
- Tom Hunter on leadership change: when leadership changes the entire philosophy of the business shifts, with real consequences for risk appetite, performance expectations, headcount decisions and the CFO's engagement with the executive team.