Company: ADP
Filing Date: 2025-09-25
Form Type: DEF 14A
Source: 0001308179-25-000607
Chunk: 49

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-09-25
Form: DEF 14A
Chunk 49
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 is fundamental to our business and directly tied to our recurring revenue model. More information will be provided in our proxy statement for fiscal year 2026. For more information on the bonus plan and measurements used for fiscal year 2025, see “Annual Cash Bonus” and “NEOs’ Fiscal Year 2025 Bonuses” in this CD&A.

| Automatic Data Processing, Inc. – Proxy Statement   | | 48 |

| Compensation Discussion and Analysis |

Compensation Principles We believe that compensation should be designed to create a direct link between performance and stockholder value. Five principles that guide our decisions involving executive compensation are that compensation should be:

| 1 | based on (i) the overall performance of the company, (ii) the performance of each executive’s business unit when applicable and (iii) each executive’s individual performance                 |
| 2 | closely aligned with the short-term and long-term financial,  client satisfaction, transformation, paperless and HCM objectives that build sustainable long-term stockholder value            |
| 3 | competitive, in order to attract and retain executives critical to our long-term success                                                                                                      |
| 4 | consistent with high standards of corporate governance and best practices                                                                                                                     |
| 5 | designed to dampen the incentive for executives to take excessive risks or to behave in ways that are inconsistent with the company’s strategic planning processes and high ethical standards |

Our compensation programs are designed so that target pay reflects relative levels of responsibility among our key executives, and such that the proportion of pay tied to operating performance and changes in stockholder value varies directly with the level of responsibility and accountability to stockholders. We assign all executives to pay grades by comparing their position-specific duties and responsibilities with market data and our internal management structure. Each pay grade has ranges for base salaries, total annual cash compensation and annual equity grants based on market competitive levels. Executives are positioned within these ranges based on a variety of factors, most notably their experience and skill set and their performance over time. We design our performance-based compensation so that actual, realized compensation will vary relative to the target award opportunity based on performance. As such, actual compensation amounts may be above or below targeted levels depending on the overall performance of the company, performance of a business unit and achievement of performance goals that support our strategy. We have adopted this compensation design to provide meaningful incentives for our key executives to achieve desired results. We also believe that it is important for our executive officers to have an ongoing long-term investment in the company as outlined on page