Company: ADP
Filing Date: 2025-09-25
Form Type: DEF 14A
Source: 0001308179-25-000607
Chunk: 57

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-09-25
Form: DEF 14A
Chunk 57
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 human capital goals                                             |     |        | 5%  |     |           | Progress on developing and growing 
 ADP’s next generation of leaders   |     |        |       |     |         |       |     |        |       |     |             | 80.6%  |

| 1 | Refer to the table in Appendix A for a reconciliation from net earnings to adjusted EBIT for fiscal years 2025 and 2024. |

In setting target financial performance goals, we consider a variety of factors including our short- and long-range strategic plan, the annual budget reviewed by our board, and the guidance provided by management on key elements of financial performance. Achievement levels are, as a percentage of target, 50% for threshold performance, 100% for target performance, 200% for stretch performance, and 0% for below threshold performance. The targets for revenue growth and adjusted EBIT growth reflect an assumed impact of foreign currency fluctuations anticipated at the time the targets were established. For each metric described above, the award level achieved within each range, as a percentage of target, is determined by linear interpolation between the lower and upper bounds. Client Satisfaction, transformation, paperless and HCM objectives for our NEOs are aligned with our key strategic goals for fiscal year 2025 and are viewed as important leading indicators of our ongoing progress, creation of long-term value and future success. The targets for each objective are established to be challenging and rigorous and require strong performance for achievement. The targets are measurable, quantifiable goals. There is no subjectivity applied to the calculation of performance against these objectives. The calculation of performance is formulaic to reflect the proportionate level of achievement relative to the target. Targets for certain measures are considered confidential business information, disclosure of which could harm our operating performance or ability to compete.

| 55 | |  Automatic Data Processing, Inc. – Proxy Statement |

| Compensation Discussion and Analysis |

Long-Term Incentive Compensation Programs We believe that long-term incentive (“LTI”) compensation is a significant factor in attracting and retaining key executives and in aligning their interests directly with the interests of our stockholders. For fiscal year 2025, long-term incentives were awarded in the form of PSUs and RSUs, with a targeted LTI mix of 75% PSUs and 25% RSUs for all our NEOs. The committee selected these awards because they ensure that the overall long-term incentive program is predominately focused on performance-based pay delivery, closely tied