Company: ADP
Filing Date: 2025-09-25
Form Type: DEF 14A
Source: 0001308179-25-000607
Chunk: 60

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-09-25
Form: DEF 14A
Chunk 60
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 for each of the individual three fiscal years in the applicable performance period will be averaged to obtain the overall financial metric award level earned as a percentage of target, which may range up to 175%. The PSU award performance design also includes a three-year rTSR metric that may modify the overall financial metric award level by +/- 20% based on the company’s performance versus the S&P 500; the inclusion of the rTSR metric is intended to provide accountability for the company’s stock price performance over the full three-year performance period. In order to align with the most prevalent peer market practices and encourage executives to achieve stretch goals, the maximum payout opportunity for PSU awards is 200% of target, inclusive of the rTSR modifier. However, payout will be capped at the target number of shares if the company’s absolute three year TSR is negative. The PSU award earned will be credited with dividend equivalents from the grant date of the target award until the issuance date, assuming all dividends were reinvested in ADP stock at the time dividends are paid. The issuance of the applicable number of PSUs earned will be made in the form of shares of ADP stock in September following the conclusion of the three-year performance period.

| 57 | |  Automatic Data Processing, Inc. – Proxy Statement |

| Compensation Discussion and Analysis |

Our adjusted net income growth for fiscal year 2025 was 10.6%, which resulted in an earned award level for the fiscal 2025 performance year in the amount of 141% of target (weighted 67%), and our revenue ex-ZMPT growth for fiscal year 2025 was 6.2%, which resulted in an earned award level for the fiscal year 2025 performance year in the amount of 115% of target (weighted 33%). These achievement percentages of target are applicable to the third of three tranches of the PSU award granted for fiscal year 2023 in September 2022, the second of three tranches of the PSU award granted for fiscal year 2024 in September 2023, and the first of three tranches of the PSU award granted for fiscal year 2025 in September 2024. Further details of the performance metrics adjusted net income and revenue ex-ZMPT can be referenced above under “2025 Incentive Compensation Performance Metrics.” The adjusted net income growth and revenue ex-ZMPT growth goals were established consistent with the committee’s long-standing methodology in setting such goals and as such, align to the financial earnings guidance the company