Notice of 2019 Annual Meeting of Stockholders
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AUTOMATIC DATA PROCESSING, INC. One ADP Boulevard Roseland, New Jersey 07068 Notice of 2019 Annual Meeting of Stockholders The 2019 Annual Meeting of Stockholders of Automatic Data Processing, Inc. will take place at 10:00 a.m., Eastern Standard Time, Tuesday, November 12, 2019 at our corporate headquarters, One ADP Boulevard, Roseland, New Jersey. A Notice of Internet Availability of Proxy Materials or the proxy statement for the 2019 Annual Meeting of Stockholders is first being mailed to stockholders on or about Thursday, September 26, 2019. The purposes of the meeting are to: 1. Elect a board of directors; 2. Hold an advisory vote on executive compensation; 3. Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2020; and 4. Transact any other business that may properly come before the meeting or any adjournment(s) thereof. Only stockholders of record at the close of business on September 13, 2019 are entitled to receive notice of, to attend, and to vote at the meeting. If you plan to attend the meeting in person, please note the admission procedures described under “How Can I Attend the Meeting?” on page 1 of the proxy statement. Your vote is important, and we urge you to vote whether or not you plan to attend the meeting. The Notice of Internet Availability of Proxy Materials instructs you on how to access our proxy materials and vote via the Internet. If you receive a paper copy of the proxy materials, you may also vote by telephone or by completing, signing, dating and returning the accompanying printed proxy in the enclosed envelope, which requires no postage if mailed in the United States. By order of the Board of Directors MICHAEL A. BONARTI Secretary September 26, 2019 Roseland, New Jersey TABLE OF CONTENTS Page 2019 Proxy Statement Summary . i Questions and Answers About the Annual Meeting and Voting. 1 Proposal 1 Election of Directors. 5 Stockholder Approval Required . 13 Corporate Governance . 14 Board Leadership Structure . 14 Board Composition and Director Succession Planning ����������������������������������������������������������������������� 14 Director Nomination Process . 15 Retirement Policy ����������������������������������������������������������������������������������������������������������������������������� 16 Committees of the Board of Directors . 16 Audit Committee ����������������������������������������������������������������������������������������������������������������������������� 17 Nominating/Corporate Governance Committee. 18 Compensation Committee ��������������������������������������������������������������������������������������������������������������� 19 Corporate Development and Technology Advisory Committee. 19 The Board’s Role in Risk Oversight. 20 The Board’s Role in Strategy Oversight ��������������������������������������������������������������������������������������������� 23 The Board’s Role in Management Succession Planning. 23 Corporate Social Responsibility and Sustainability Governance . 24 Communications with All Interested Parties . 24 Transactions with Related Persons . 25 Availability of Corporate Governance Documents ����������������������������������������������������������������������������� 25 Compensation Committee Interlocks and Insider Participation . 25 Compensation of Non-Employee Directors . 26 Director Compensation Table For Fiscal Year 2019 . 28 Security Ownership of Certain Beneficial Owners and Management . 30 Equity Compensation Plan Information. 32 Proposal 2 Advisory Vote on Executive Compensation . 33 Stockholder Approval Required . 33 Compensation Discussion and Analysis. 34 Executive Summary. 34 Compensation Principles . 40 Cash Compensation ������������������������������������������������������������������������������������������������������������������������� 44 Long-Term Incentive Compensation Programs . 46 Other Compensation Components and Considerations ��������������������������������������������������������������������� 49 Compensation Committee Report ����������������������������������������������������������������������������������������� 52 Compensation of Executive Officers . 53 Summary Compensation Table for Fiscal Year 2019 ��������������������������������������������������������������������������� 53 All Other Compensation for Fiscal Year 2019. 54 Grants of Plan-Based Awards Table for Fiscal Year 2019. 56 Restricted Stock/Performance Stock Units ����������������������������������������������������������������������������������������� 57 Stock Options . 58 Outstanding Equity Awards for Fiscal Year-End 2019 . 59 Outstanding Equity Vesting Schedule for Fiscal Year-End 2019. 61 Option Exercises and Stock Vested Table for Fiscal Year 2019 . 63 Pension Benefits for Fiscal Year 2019 . 64 Automatic Data Processing, Inc. Pension Retirement Plan. 65 Supplemental Officers Retirement Plan ��������������������������������������������������������������������������������������������� 65 Deferred Compensation Program ����������������������������������������������������������������������������������������������������� 66 Executive Retirement Plan . 66 Non-Qualified Deferred Compensation for Fiscal Year 2019 . 67 Potential Payments to Named Executive Officers Upon Termination or Change in Control ����������������������������������������������������������������������� 68 Change in Control Severance Plan for Corporate Officers. 68 Corporate Officer Severance Plan ����������������������������������������������������������������������������������������������������� 69 Health Coverage . 70 Deferred Compensation ������������������������������������������������������������������������������������������������������������������� 70 Termination and Change in Control Tables ��������������������������������������������������������������������������������������� 70 Potential Payments upon Termination or Change in Control for Carlos A. Rodriguez ������������������������� 71 Potential Payments upon Termination or Change in Control for Kathleen A. Winters ������������������������� 72 Potential Payments upon Termination or Change in Control for Jan Siegmund . 73 Potential Payments upon Termination or Change in Control for Michael A. Bonarti ��������������������������� 74 Potential Payments upon Termination or Change in Control for Thomas J. Perrotti . 75 Potential Payments upon Termination or Change in Control for Maria Black. 76 CEO Pay Ratio ����������������������������������������������������������������������������������������������������������������������������������� 77 Audit Committee Report . 78 Independent Registered Public Accounting Firm’s Fees ��������������������������������������������� 80 Proposal 3 Appointment of Independent Registered Public Accounting Firm ����������������������������������������������������������������������������������������������������������� 81 Stockholder Approval Required . 81 Stockholder Proposals ����������������������������������������������������������������������������������������������������������������� 82 Electronic Delivery of Future Stockholder Communications . 84 Appendix A: Reconciliation of GAAP and Non-GAAP Information . A-1 2019 Proxy Statement Summary Our summary highlights certain information contained elsewhere in the proxy statement and does not contain all of the information that you should consider. You should read the entire proxy statement carefully before voting. 2019 Annual Meeting of Stockholders Time and Date 10:00 a.m. Eastern Standard Time, November 12, 2019 Place One ADP Boulevard, Roseland, New Jersey, 07068 Record Date Stockholders of record at the close of business on September 13, 2019 are entitled to vote at the meeting in person or by proxy. Admission Admission to the meeting is restricted to stockholders and/or their designated representatives. All stockholders will be required to show valid picture identification and proof of ownership in order to be admitted to the meeting. Proxy Materials Under rules adopted by the Securities and Exchange Commission (“SEC”), we are furnishing proxy materials to our stockholders primarily via the Internet instead of mailing printed copies of those materials to each stockholder. On September 26, 2019, we commenced the mailing to our stockholders of a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials. Our proxy materials were mailed to those stockholders who have previously asked to receive paper copies. If you would prefer to receive printed proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials via e-mail unless you elect otherwise. How to Vote The Notice of Internet Availability of Proxy Materials instructs you on how to vote through the Internet. If you receive a paper copy of the proxy materials, you may also vote your shares by telephone or by completing, signing, dating and returning the accompanying printed proxy in the enclosed envelope, which requires no postage if mailed in the United States. Voting Matters and Board Voting Recommendation Board Page Reference For Proposal Recommendation More Detail Proposal 1: Election of directors For Each Nominee 5 Proposal 2: Advisory resolution to approve compensation For 33 of named executive officers Proposal 3: Ratification of Deloitte & Touche LLP as our For 81 independent registered