| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers. |
On October 26, 2022, Automatic Data Processing, Inc. (the “Company”
or “ADP”) announced that the Company’s Board of Directors has appointed Maria Black to the position of President and
Chief Executive Officer (“CEO”) and Carlos A. Rodriguez to the position of Executive Chair of the Board of Directors, each
effective as of January 1, 2023. On October 26, 2022, the Company’s Board of Directors also elected Maria Black to the Board of
Directors, effective as of January 1, 2023. In connection with this transition, John P. Jones, the current Non-Executive Chairman of the
Board of Directors, will assume an independent Lead Director role on the Board, also effective January 1, 2023. This leadership structure
is intended to ensure a seamless and successful CEO transition, and the Board of Directors believes this leadership structure is in the
best interests of the Company’s stockholders at this time.
Ms. Black, age 48, has been the President of ADP since January
2022. Prior to that, she was President, Worldwide Sales and Marketing of ADP since February 2020 and served
as President, Small Business Solutions and Human Resources Outsourcing from January 2017 to February 2020, as President, ADP TotalSource
from July 2014 to December 2016, as General Manager, ADP United Kingdom from April 2013 to June 2014, and as General Manager,
Employer Services - TotalSource Western Central Region from January 2008 to March 2013. Ms. Black joined ADP in 1996.
Mr. Rodriguez, age 58, has been the Chief Executive Officer since November 2011. He served as President and Chief Operating Officer of
the Company before he was appointed to his current position in November 2011 and served as President through 2021. Having started his
career at the Company in 1999, Mr. Rodriguez previously served as President of several key businesses, including National Accounts Services,
Employer Services International, Small Business Solutions, and Professional Employer Organization. Mr. Rodriguez is currently a director
of Microsoft Corporation.
Effective January 1, 2023, the Company is providing Ms. Black the following key compensation and benefits:
| · | An annual base salary of $1,100,000; |
| · | An annual target bonus of 200% of annual base salary, which will be prorated based on service during the fiscal year, with the payout
to be calculated based on performance against a set of objectives under the Company’s Annual Cash Bonus Plan for Officers; |
| · | Participation in the long-term incentive compensation program for executives consisting of performance-based stock units (“PSUs”)
and restricted stock units (“RSUs”), with an expected annual total target equity award value of $12,225,000 for fiscal year
2023 reflecting a pro-rated target award of $3,300,000 to be granted on January 1, 2023 (reflecting a mix of 75% PSUs and 25% RSUs), incremental
to Ms. Black’s pre-existing equity award made on September 1, 2022 with a target value of $5,625,000 (granted with a mix of 75%
PSUs and 25% RSUs) in connection with her prior role; and |
| · | Continued participation in the Company’s Corporate Officer Severance Plan and Change in Control Severance Plan for Corporate
Officers (each at a CEO level) and all of the Company’s other applicable 401(k), executive retirement, deferred compensation, medical
and health, life, accident, disability and other insurance programs, stock purchase and certain other perquisite and benefit programs
on the same basis as similarly situated senior executives. |
As Executive Chair, Mr. Rodriguez would remain an active associate
and executive officer of the Company. Effective January 1, 2023, the Company is providing Mr. Rodriguez the following key compensation
and benefits:
| · | An annual base salary of $605,400; |
| · | An annual target bonus of 150% of annual base salary, which will be prorated based on service during the fiscal year, with the payout
to be calculated based on performance against a set of objectives under the Company’s Annual Cash Bonus Plan for Officers; |
| · | Continued participation in the long-term incentive compensation program for executives consisting of PSUs and RSUs; and |
| · | Continued participation in the Company’s Corporate Officer Severance Plan, Change in Control Severance Plan for Corporate Officers
and all of the Company’s other applicable 401(k), executive retirement, deferred compensation, medical and health, life, accident,
disability and other insurance programs, stock purchase and certain other perquisite and benefit programs on the same basis as similarly
situated senior executives. |
Ms. Black and Mr. Rodriguez remain
subject to the Company’s Clawback Policy as well as stock ownership guidelines, which will require each of them to have an ownership
target in Company stock equal to six times base salary.
A copy of the press release announcing
the appointments of Ms. Black and Mr. Rodriguez is attached hereto as Exhibit 99 and is hereby incorporated by reference.