Advisory Resolution to Approve Executive Compensation (Proposal 2)

Consistent with the stockholders’ advisory vote at our 2011 Annual Meeting of Stockholders, we determined to hold the advisory say-on-pay vote to approve our named executive officer compensation on an annual

basis. Therefore, we are asking our stockholders to approve, on an advisory basis, our named executive officer compensation for fiscal year 2015. Our stockholders will have the opportunity to approve, on an advisory basis, our named executive officer compensation for fiscal year 2016 at the 2016 Annual Meeting of Stockholders.

The board of directors recommends a vote FOR this resolution because it believes that the policies and practices described in the “Compensation Discussion and Analysis” section on page 22 of this proxy statement are effective in achieving the company’s goals of linking pay to performance and levels of responsibility, encouraging our executive officers to remain focused on both short-term and long-term operational and financial goals of the company and linking executive performance to stockholder value.

At our 2014 Annual Meeting of Stockholders, our stockholders approved the compensation of our fiscal year 2014 named executive officers by a vote of approximately 96% in favor.

Ratification of the Appointment of Auditors (Proposal 3)

We are asking our shareholders to ratify the selection of Deloitte & Touche LLP (“Deloitte”) as our independent certified public accountants for fiscal year 2016. A summary of fees paid to Deloitte for services provided in fiscal years 2014 and 2015 is provided on page 62 of this proxy statement.

Fiscal Year 2015 Business Highlights

During fiscal year 2015, we more narrowly focused our attention on our global HCM strategy, and our results continue to reflect our success in the market. This increased focus is evidenced by the spin-off of our former Dealer Services business on September 30, 2014, and our investments in product innovation and our salesforce. Our key business metrics in fiscal year 2015 continued to reflect the core strength of our underlying business model, which consists of a high percentage of recurring revenues, strong client retention, good margins, and the ability to generate consistent, healthy cash flows, with low capital requirements. The compensation committee’s determination of incentive compensation under our cash bonus program for all of our executive officers, including our named executive officers, was based on fiscal year 2015 revenue growth of 8.7% compared to a target of 8.0%, excluding the effect of foreign exchange rate movement, operating income growth of 10.4% compared to a target of 12.0%, excluding the impact of certain non-recurring items related to the Dealer Services spin-off, and sales growth of 12.7% compared to a target of 8.0%. The incentive compensation under our PSU program was based on fiscal year 2015 earnings per share growth of 12.5% compared to a target of 11.3%.

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:

Good Governance and Best Practices

We are committed to ensuring that our compensation programs reflect principles of good governance, including the following:

2015 Compensation Highlights

Consistent with our pay for performance philosophy, the compensation of our named executive officers is structured with a significant portion of their total compensation at risk and paid based on the performance of the company and the applicable business unit. Our financial performance in fiscal year 2015 impacted the compensation for all of our executive officers, not just our named executive officers, in several ways, most notably through our annual cash bonus plan and performance-based restricted stock program. Please refer to the “Compensation Discussion and Analysis” section on page 22 of this proxy statement, and the tables and narratives that follow on page 37 of this proxy statement, for more detail concerning the compensation of our named executive officers.

The mix of total direct compensation (base salary, cash bonus, and long-term incentive awards) for fiscal year 2015 was designed to deliver the following approximate proportions of total compensation to Mr. Rodriguez, our chief executive officer, and the other named executive officers (on average) if company and individual target levels of performance are achieved:

Important Dates for the 2016 Annual Meeting of Stockholders

Please refer to the “Stockholder Proposals” section on page 64 of this proxy statement for more information regarding the applicable requirements for submission of stockholder proposals.

If a stockholder intends to submit any proposal for inclusion in the company’s proxy statement for the company’s 2016 Annual Meeting of Stockholders in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, the proposal must be received by the corporate secretary of the company no later than May 27, 2016.

Separate from the requirements of Rule 14a-8 relating to the inclusion of a stockholder proposal in the company’s proxy statement, the company’s amended and restated by-laws require that notice of a stockholder nomination for candidates for our board of directors or any other business to be considered at the company’s 2016 Annual Meeting of Stockholders must be received by the company no earlier than July 13, 2016, and no later than the close of business (5:30 p.m. Eastern Daylight Time) on August 11, 2016.

The board of directors of Automatic Data Processing, Inc. is soliciting your proxy to vote at the 2015 Annual Meeting of Stockholders to be held on November 10, 2015 at 10:00 a.m. Eastern Standard Time, and at any postponement(s) or adjournment(s) thereof. The meeting will be held at our corporate headquarters, One ADP Boulevard, Roseland, New Jersey.

Under rules adopted by the Securities and Exchange Commission, 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 24, 2015, we commenced the mailing to our stockholders (other than those who previously requested electronic or paper delivery of printed proxy materials) of a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our proxy statement and our annual report on Form 10-K (which is not a part of the proxy soliciting material). This process is designed to expedite stockholders’ receipt of proxy materials, lower the cost of the Annual Meeting, and help conserve natural resources.

However, 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.

The only outstanding class of securities entitled to vote at the meeting is our common stock, par value $0.10 per share. At the close of business on September 11, 2015, the record date for determining stockholders entitled to notice of, to attend, and to vote at the meeting, we had 465,273,419 issued and outstanding shares of common stock (excluding 173,439,023 treasury shares not entitled to vote). Each outstanding share of common stock is entitled to one vote with respect to each matter to be voted on at the meeting.

This proxy statement and our annual report on Form 10-K are also available on our corporate website at www.adp.com under “Financials” in the “Investor Relations” section.

The board of directors’ categorical standards of director independence are consistent with NASDAQ Stock Market (“NASDAQ”) listing standards and are available in the company’s corporate governance principles on our corporate website at www.adp.com under “Investor Relations” in the “Corporate Governance” section. The board of directors has determined that Ms. Alemany, Ms. Gooden, and Messrs. Brun, Clark, Fast, Gregoire, Hubbard, and Jones meet these standards and are independent directors for purposes of the NASDAQ listing standards. All current members of the audit, compensation and nominating/ corporate governance committees are independent. Mr. Brun, our independent non-executive chairman of the board until our 2015 Annual Meeting of Stockholders, is not a member of any of these board committees.

It is our policy that our directors attend the Annual Meetings of Stockholders. Eight directors attended our 2014 Annual Meeting of Stockholders.

During fiscal year 2015, our board of directors held five meetings. All of our incumbent directors attended at least 75%, in the aggregate, of the meetings of the board of directors and the committees of which they were members during the periods that they served on our board of directors during fiscal year 2015.

Executive sessions of the non-management directors are held during each board of directors and committee meeting. Mr. Brun, our independent non-executive chairman of the board, presided at each executive session of the board of directors, and Mr. Jones, who will be our independent non-executive chairman of the board following our 2015 Annual Meeting of Stockholders, will preside at each executive session of the board of directors.

Our Corporate Governance Principles do not require the separation of the roles of chairman of the board and chief executive officer because the board believes that effective board leadership can depend on the skills and experience of, and personal interaction between, people in leadership roles. Our board of directors is currently led by Mr. Brun, our independent non-executive chairman of the board, and, following our 2015 Annual Meeting of Stockholders, will be led by Mr. Jones, who will become our independent non-executive chairman following the meeting. Mr. Rodriguez,

our chief executive officer, serves as a member of the board of directors. The board of directors believes this leadership structure is in the best interests of the company’s stockholders at this time. Separating these positions allows our chief executive officer to focus on developing and implementing the company’s business plans and supervising the company’s day-to-day business operations, and allows our chairman of the board to lead the board of directors in its oversight, advisory, and risk management roles.

When the board of directors decides to recruit a new member, or when the board of directors considers any director candidates submitted for consideration by our stockholders, it seeks strong candidates who, ideally, meet all of its categorical standards of director independence, and who are, preferably, senior executives of large companies who have backgrounds directly related to our technologies, markets and/or clients. Additionally, candidates should possess the following personal characteristics: (i) business community respect for his or her integrity, ethics, principles, insights and analytical ability; and (ii) ability and initiative to frame

insightful questions, speak out and challenge questionable assumptions and disagree without being disagreeable. The nominating/corporate governance committee will not consider candidates who lack the foregoing personal characteristics. In addition, the nominating/corporate governance committee considers a wide range of other factors in determining the composition of our board of directors, including age, diversity of background, diversity of thought, and other individual qualities such as professional experience, skills, education, and training.

Nominations of candidates for our board of directors by our stockholders for consideration at our 2015 Annual Stockholder Meeting are subject to the deadlines and other

requirements described under “Stockholder Proposals” on page 64 of this proxy statement.

Each director will automatically retire from the board of directors at the company’s Annual Meeting of Stockholders following the date he or she turns 72. Management directors

who are no longer officers of the company are required to offer to resign from the board of directors.

Our board of directors provides oversight with respect to the company’s enterprise risk assessment and risk management activities, which are designed to identify, prioritize, assess, monitor and mitigate the various risks confronting the company, including risks that are related to the achievement of the company’s operational and financial strategy. The board of directors performs this oversight function periodically as part of its meetings and also through its committees, each of which examines various components of enterprise risk as part of its assigned responsibilities. Management is responsible for implementing and supervising day-to-day risk management processes and reporting to the board of directors and its committees as necessary.

Our audit committee focuses on financial risks, including reviewing with management, the company’s internal auditors, and the company’s independent auditors the company’s major financial risk exposures, the adequacy and effectiveness of accounting and financial controls, and the steps management has taken to monitor and control financial risk exposures. In addition, our audit committee reviews risks related to compliance with applicable laws, regulations, and ethical standards, and also operational risks related to information security and system disruption. Our audit committee regularly receives, reviews and discusses with management presentations and analyses on various risks confronting the company.

Our nominating/corporate governance committee oversees risks associated with board structure and other corporate governance policies and practices, including review and approval of any related-party transactions under our Related Persons Transaction Policy. Our compensation committee oversees risks related to compensation matters. Our committees report on risk oversight matters directly to the board of directors on a regular basis.

All interested parties who wish to communicate with the board of directors, the audit committee, or the non-management directors, individually or as a group, may do so by sending a detailed letter to P.O. Box 34, Roseland, New Jersey 07068, leaving a message for a return call at 973-974-5770 or sending an email to

adp_audit_committee@adp.com. We will relay any such communication to the non-management director to which such communication is addressed, if applicable, or to the most appropriate committee chairperson, the chairman of the board, or the full board of directors, unless, in any case, it is outside the scope of matters

considered by the board of directors or duplicative of other communications previously forwarded to the board of directors. Communications to the board of directors, the non-management directors, or to any individual director

that relate to the company’s accounting, internal accounting controls, or auditing matters are referred to the chairperson of the audit committee.

We have a written “Related Persons Transaction Policy” pursuant to which any transaction between the company and a “related person” in which such related person has a direct or indirect material interest, and where the amount involved exceeds $120,000, must be submitted to our nominating/corporate governance committee for review, approval, or ratification.

A “related person” means a director, executive officer or beneficial holder of more than 5% of the company’s outstanding common stock, or any immediate family member of the foregoing, as well as any entity at which any such person is employed, is a partner or principal (or holds a similar position), or is a beneficial owner of a 10% or greater direct or indirect equity interest. Our directors and executive officers must inform our general counsel at the earliest practicable time of any plan to engage in a potential related person transaction.

This policy requires our nominating/corporate governance committee to be provided with full information concerning the proposed transaction, including the benefits to the company and the related person, any alternative means by which to obtain like benefits, and terms that would prevail in a similar transaction with an unaffiliated third party. In considering whether to approve any such transaction, the nominating/corporate governance committee will consider all relevant factors, including the nature of the interest of the related person in the transaction and whether the transaction may involve a conflict of interest.

Specific types of transactions are excluded from the policy, such as, for example, transactions in which the related person’s interest derives solely from his or her service as a director of another entity that is a party to the transaction.

Our Corporate Governance Principles and Related Persons Transaction Policy may be viewed online on the company’s website at www.adp.com under ”Investor Relations” in the “Corporate Governance” section. Our Code of Business Conduct & Ethics and Code of Ethics for Principal Executive Officer and Senior Financial Officers may be

found at www.adp.com under “Investor Relations” in the “Corporate Governance” section. In addition, these documents are available in print to any stockholder who requests them by writing to Investor Relations at the company’s headquarters.

Messrs., Clark, Hubbard and Jones are the three independent directors who sit on the compensation committee. No compensation committee member has ever been an officer of the company. During fiscal year 2015 and as of the date of this proxy statement, no compensation committee member has been an employee of the company or eligible to participate in our employee compensation programs or plans, other than the company’s

2008 Omnibus Award Plan under which non-employee directors have received stock option grants and deferred stock units. None of the executive officers of the company have served on the compensation committee or on the board of directors of any entity that employed any of the compensation committee members or directors of the company.

The annual retainer for non-employee directors, other than Mr. Brun, the chairman of our board of directors, is $230,000, $135,000 of which is paid in the form of deferred stock units and $95,000 of which may, at the election of each director, be paid in cash or in deferred stock units. The chairman of our board of directors receives an annual retainer of $395,000, $235,000 of which is paid in the form of deferred stock units and $160,000 of which may, at the election of the chairman of our board of directors, be paid in cash or in deferred stock units. The chairperson of each of the audit committee and the compensation committee was paid an additional annual retainer of $15,000, and the chairperson of each of the nominating/corporate governance committee and the corporate development and technology advisory committee was paid an additional annual retainer of $10,000. Meeting fees are not paid in respect of the first seven meetings of the board of directors or of any individual committee. Non-employee directors receive $2,000 for each board of directors meeting attended and $1,500 for each committee meeting attended beginning with the eighth meeting of the board of directors or any individual committee, as applicable. Meeting fees and the additional annual retainer may, at the election of each director, be paid in cash, deferred, or paid in deferred stock units.

Effective at the time of the 2015 Annual Meeting of Stockholders, the annual retainer for non-employee directors will be increased to $260,000, $155,000 of which will be paid in the form of deferred stock units and $105,000 of which may, at the election of each director, be paid in cash or in deferred stock units. The annual retainer for the chairman of our board of directors will also be restructured to include an incremental retainer of $165,000, $82,500 of which will be paid in the form of deferred stock units and $82,500 of which may, at the election of the chairman, be paid in cash or in deferred stock units. The addition of the incremental retainer will result in a total annual retainer of $425,000 for the chairman of our board of directors. The annual retainer for the chairperson of the audit committee will also be increased by $5,000 to $20,000.

With the exception of Mr. Brun, all of our non-employee directors chose to receive the entire elective portion of their annual retainers in the form of deferred stock units. For his service during fiscal year 2015, Mr. Brun elected to receive the $160,000 portion of his annual retainer in the form of cash. Under our 2008 Omnibus Award Plan, a director may

specify whether, upon separation from the board, he or she would like to receive the deferred cash amounts in such director’s deferred account in a lump sum payment or in a series of substantially equal annual payments over a period ranging from two to ten years.

Pursuant to our 2008 Omnibus Award Plan, each non-employee director is credited with an annual grant of deferred stock units on the date established by the board for the payment of the annual retainer equal in number to the quotient of $135,000, or $235,000 in the case of the chairman of the board of directors, divided by the closing price of a share of our common stock on the date this amount is credited. Deferred stock units are fully vested when credited to a director’s account. When a dividend is paid on our common stock, each director’s account is credited with an amount equal to the cash dividend. When a director ceases to serve on our board, such director will receive a number of shares of common stock equal to the number of deferred stock units in such director’s account and a cash payment equal to the dividend payments accrued, plus interest on the dividend equivalents from the date such dividend equivalents were credited. The interest will be paid with respect to each twelve-month period beginning on November 1 of such period to the date of payment and will be equal to the rate for five-year U.S. Treasury Notes published in The Wall Street Journal® on the first business day of November of each such twelve-month period plus 0.50%. Non-employee directors do not have any voting rights with respect to their deferred stock units.

Non-employee directors no longer receive annual stock option grants. Prior to our 2010 Annual Meeting of Stockholders, upon initial election to the board of directors, a non-employee director received a grant of options to purchase 5,000 shares of common stock if such director attended a regularly scheduled board of directors meeting prior to the next Annual Meeting of Stockholders. Thereafter, a non-employee director received an annual grant of options to purchase 5,000 shares of common stock. All such options were granted under the 2008 Omnibus Award Plan, have a term of ten years, and were granted at the fair market value of the common stock as determined by the closing price of our common stock on the NASDAQ Global Select Market on the date of the grant.

Options granted to our non-employee directors under the 2008 Omnibus Award Plan are exercisable in four equal installments, with the first twenty-five percent becoming

exercisable on the first anniversary of the option’s grant date, and the remaining three installments becoming exercisable on each successive anniversary date thereafter. The options vest only while a director is serving in such capacity, unless certain specified events occur, such as death or permanent disability, in which case the options immediately vest and become fully exercisable. In addition, non-employee directors who have been non-employee directors for at least ten years will have all of their options

vested upon retirement from the board of directors and will have 36 months to exercise their options. Non-employee directors who have served as non-employee directors for fewer than ten years at the time they retire or otherwise leave the board will not qualify for accelerated vesting, but will have 60 days to exercise their then-vested options. Notwithstanding the foregoing, all options will expire no more than ten years from their date of grant.

The following table contains information regarding the beneficial ownership of the company’s common stock by (i) each director and nominee for director of the company, (ii) each of our named executive officers included in the Summary Compensation Table below (we refer to such executive officers as “named executive officers”), (iii) all company directors and executive officers as a group (including the named executive officers) and (iv) all stockholders that are known to the company to be the

beneficial owners of more than 5% of the outstanding shares of the company’s common stock. Unless otherwise noted in the footnotes following the table, each person listed below has sole voting and investment power over the shares of common stock reflected in the table. Unless otherwise noted in the footnotes following the table, the information in the table is as of August 31, 2015 and the address of each person named is P.O. Box 34, Roseland, New Jersey, 07068.

We are asking stockholders to approve the following advisory resolution at the Annual Meeting:

RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the company’s named executive officers as disclosed in the Compensation Discussion and Analysis, the accompanying compensation tables and the related narrative disclosure in the company’s proxy statement for the 2015 Annual Meeting of Stockholders.

The board of directors recommends a vote FOR this resolution because it believes that the policies and practices described in the Compensation Discussion and Analysis are effective in achieving the company’s goals of linking pay to

performance and levels of responsibility, encouraging our executive officers to remain focused on both short-term and long-term operational and financial goals of the company and linking executive performance to stockholder value.

We urge stockholders to read the Compensation Discussion and Analysis section appearing on pages 22 through 36 of this proxy statement, as well as the “Summary Compensation Table For Fiscal Year 2015” and related compensation tables and narrative appearing on pages 37 through 59 of this proxy statement, which provide detailed information on the company’s compensation policies and practices and the compensation of our named executive officers.

The affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote thereon at the meeting of stockholders is required to approve the advisory resolution on named executive compensation. Because the vote on this proposal is advisory in nature, it will not affect any compensation already paid or awarded to any named executive officer and will not be binding on or overrule any decisions by the compensation committee or the board of directors. Because we value our

stockholders’ views, however, the compensation committee and the board of directors will consider the results of this advisory vote when formulating future executive compensation policy.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE APPROVAL OF THE ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION.

The CD&A also provides an overview of our executive compensation philosophy and explains how the compensation committee of our board of directors arrives at specific compensation decisions involving the NEOs. In addition, the CD&A explains how our executive compensation programs are designed and operate with respect to our NEOs by discussing the following fundamental aspects of our compensation programs:

Strong Stockholder Support for our Compensation Programs

The compensation committee continuously evaluates the degree to which our compensation programs link pay to performance, and takes steps to ensure that the program encourages our executive officers to remain focused on both the short-term and long-term operational and financial goals of the company.

At our 2014 Annual Meeting of Stockholders, our stockholders approved the compensation of our fiscal year 2014 NEOs by a vote of approximately 96% in favor. Given this strong support and the company’s continued strong performance, the compensation committee retained the basic foundation of our overall compensation program during fiscal year 2015, but made certain changes to ensure that the program continued to support our key human resource, financial and strategic objectives.

Fiscal Year 2015 Business Highlights

During fiscal year 2015, we more narrowly focused our attention on our global HCM strategy, and our results continue to reflect our success in the market. This increased focus is evidenced by the spin-off of our former Dealer Services business on September 30, 2014, and our investments in product innovation and our salesforce. Our key business metrics in fiscal year 2015 continued to reflect the core strength of our underlying business model, which consists of a high percentage of recurring revenues, strong client retention, good margins, and the ability to generate consistent, healthy cash flows, with low capital requirements.

Our financial performance impacted the compensation of our executive officers in several ways, most notably our annual cash bonus plan and performance stock unit (PSU) program. The compensation committee’s determination

of incentive compensation under our cash bonus program for all of our executive officers, including our named executive officers, was based on fiscal year 2015 revenue growth of 8.7% compared to a target of 8.0%, excluding the effect of foreign exchange rate movement, operating income growth of 10.4% compared to a target of 12.0%,

excluding the impact of certain non-recurring items related to the Dealer Services spin-off, and sales growth of 12.7% compared to a target of 8.0%. The incentive compensation under our PSU program was based on fiscal year 2015 earnings per share growth of 12.5% compared to a target of 11.3%.

For fiscal year 2015, our named executive officers received cash bonuses that averaged approximately 123% of target. As a result of our one-year earnings per share growth for fiscal year 2015, our executive officers achieved a payout percentage of 120% under our PSU program. This percentage payout applied to year 1 of the fiscal year 2015 award, which will be earned and issued at the end of the corresponding three-year performance period ending in fiscal year 2017 and to year 2 of the fiscal year 2014 award, which will be earned and issued at the end of the corresponding three-year performance period

ending in fiscal year 2016. As described on page 32 of this proxy statement under “Performance-Based Stock Awards,” the payout percentages achieved for each of the individual three fiscal years in the performance period will be averaged to obtain the award level earned and issued as a percentage of target.

Good Governance and Best Practices

We are committed to ensuring that our compensation programs reflect principles of good governance. The following practices are key aspects of our programs:

As part of our commitment to principles of good governance, we do not engage in the following practices:

Looking Forward

In fiscal year 2016, we will introduce a customized peer group for use in compensation analyses of compensation levels and practices. With the spin-off of our former Dealer Services business in fiscal year 2015, and as ADP focuses on becoming a leading global provider of Human Capital Management solutions, we believe that it is important to have a customized peer group to benchmark our executive officers’ pay levels and our financial performance in connection with pay-for-performance evaluations, as well as our practices concerning equity compensation and other executive compensation programs. The customized peer group was developed with assistance from Cook & Co. based upon the following criteria: comparable business model, company size, executive talent sources, competition for investor capital, companies considered to be our peers by investors and overall reasonableness. The companies included in our 20-company peer group that will be introduced for fiscal year 2016 are as follows:

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 shareholder value varies directly with the level of responsibility and accountability to shareholders. 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. 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 vary above or below targeted levels depending on the overall performance of the company, performance of a business unit and achievement of individual performance goals. We have adopted this

compensation design to provide meaningful incentives for our key executives to achieve excellent 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 35 of this proxy statement under “Stock Ownership Guidelines.”

Growth in revenue and operating income are important performance measures in annual cash bonus determinations, and earnings per share growth is used to determine the number of shares earned in a performance period under our performance-based stock program. These performance criteria were chosen for the variable incentive plans because they focus our executive officers on the company’s long-term strategic goals of increasing the growth and profitability of our business, which are the key drivers of sustainable increases in stockholder value.

The earnings per share measurement we use is diluted earnings per share from continuing operations.

Consistent with our pay for performance philosophy, our named executive officers’ compensation is structured with a significant portion of their total compensation at risk. This at-risk portion includes long-term incentive awards, which are paid based on the performance of the company as a whole, and annual cash bonuses, which are paid on the basis of the bonus objectives established by the compensation committee as described below under “Fiscal Year 2015 Target Bonus Objectives”.

The mix of total direct compensation (base salary, cash bonus and long-term incentive awards) for fiscal year 2015 was designed to deliver the following approximate proportions of total compensation to Mr. Rodriguez, our chief executive officer, and the other named executive officers (on average) if company and individual target levels of performance are achieved. The target pay mix reflects the PSU target award based on the three-year target opportunity. Mr. Rodriguez’s higher portion of at-risk compensation reflects his greater responsibility for overall company performance.

Compensation Consultant

The compensation committee has engaged Cook & Co. to provide assistance with the design of our compensation programs, the development of comparative market-based compensation data for the chief executive officer position and the determination of the chief executive officer’s target compensation awards. The specific matters on which Cook & Co. provided advice in fiscal year 2015 were the design of executive compensation programs and practices, including the changes to chief executive officer pay levels, reviewing long-term incentive guidelines, developing and proposing the peer group of 20 companies, and researching and

developing recommendations for an officer severance plan. In June 2014, Cook & Co. delivered to our compensation committee the results of a competitive assessment of compensation for use in determining fiscal year 2015 target compensation for Mr. Rodriguez. Cook & Co. also examined the mix of proposed performance-based stock awards and stock option grants for our named executive officers in fiscal year 2015 and confirmed that the proposals for the named executive officers were reasonable and customary, given the company’s size and structure.

As part of its ongoing support to the compensation committee, Cook & Co. also reviews executive compensation disclosures (including this Compensation Discussion and Analysis), reviews and provides comments on changes to the committee’s charter, advises on emerging trends and the implications of regulatory and governance developments, and reviews and provides commentary on materials and proposals prepared by management that are presented at the committee’s meetings.

The compensation committee determined that the work of Cook & Co. did not raise any conflicts of interest in fiscal year 2015. In making this assessment, the compensation committee considered the independence factors enumerated in Rule 10C-1(b) under the Securities Exchange Act of 1934 and applicable Nasdaq listing standards, including the fact that Cook & Co. does not provide any other services to the company, the level of fees received from the company as a percentage of Cook & Co.’s total revenue, policies and procedures employed by Cook & Co. to prevent conflicts of interest, and whether the individual Cook & Co. advisers to the compensation committee own any stock of the company or have any business or personal relationships with members of the compensation committee or our executive officers.

Compensation Review and Determination

Our annual pay review focuses on base salary, annual cash bonus and long-term equity incentives. In determining the compensation of our named executive officers, we consider the type of business we are in and the nature of our organization. The compensation committee also considers market data provided by their independent compensation consultant and by management. The compensation committee examines summary compensation sheets detailing the amounts and mix of base salary, cash bonus,

and equity grants for each of our named executive officers, which compare the amounts and mix to competitive compensation practices. We generally target base salary, annual cash bonus and long-term equity incentives at the median of competitive compensation levels, but we will set targets above or below the median when warranted in the judgment of the compensation committee. The degree to which target compensation ranges above or below the median competitive rate is primarily based on each executive’s skill set and experience relative to market peers. Executives who are new in their roles and therefore less experienced than market peers are typically positioned lower in the range, whereas executives with more experience in their roles may be positioned higher in the range.

We consult different sets of compensation data reflecting the levels and practices of different groups of businesses to determine competitive compensation levels for our chief executive officer and other named executive officers.

Chief Executive Officer. In benchmarking Mr. Rodriguez’s compensation, the compensation committee, at its June 2014 meeting, reviewed the market compensation data from all U.S. public companies with annual revenue between $8 billion and $14 billion based on reported financials as of April 30, 2014 (103 companies), which we believe is representative of the competitive environment we face with respect to senior executives. Utility companies were excluded because of the regulatory environment in which they operate. Mr. Rodriguez’s base salary, target cash compensation, and his target direct compensation were in the range of the 25^th percentile of the compensation of the chief executive officers of the comparison companies. The competitive positioning reflected Mr. Rodriguez’s early tenure in his position as our chief executive officer, and it is the compensation committee’s intention to increase his target compensation towards the median over time as his experience increases, assuming continued strong performance.

Other Named Executive Officers. With respect to the total cash and long-term incentive compensation for Messrs. Siegmund, Benjamin, Flynn and Bonarti, management provided the compensation committee with competitive compensation market data based on compensation surveys

reflecting the pay practices of publicly traded companies. The surveys used were the Towers Watson^® U.S. General Industry Executive Database, the Hewitt Associates^® Executive Total Compensation by Industry Survey, the Mercer U.S. General Industry Executive Database and the Equilar Inc.^® Top 25 Database. The number of companies included in the surveys ranged from 8 to 76. The survey data is general and provides broad ranges. The compensation committee therefore does not review the actual companies or the compensation information of the specific organizations included in each sample, but rather reviews the interquartile range (i.e., median as well as the 25^th and 75^th percentiles). The companies included for Messrs. Siegmund, Flynn and Bonarti were based on a revenue range such that the median company revenue approximates the annual revenue of ADP. The companies included for Mr. Benjamin were based on a revenue range such that the median company revenue approximates the annual revenue of the business units that he leads.

Differences in Compensation of Our Named Executive Officers

We carefully designed the pay mix for our chief executive officer to be competitive when measured against the pay packages of other chief executive officers as indicated by the compensation study.

We have found that due to the broad responsibilities and the experience required for the chief executive officer position, compensation for chief executive officers in public companies that are similar in size to ours is significantly higher than compensation for their other named executive officers.

When determining the compensation level for each of our executive officers, the compensation committee reviews each individual compensation element based on the previous year’s level, as well as how the proposed level of that individual compensation element for each executive officer would compare to the other executive officers. The aggregate level for each executive officer’s compensation is then compared against the executive’s previous year’s totals and against compensation of other executive officers of the company.

Base Salary

Base salaries are a fixed amount paid to each executive for performing his or her normal duties and responsibilities. We determine the amount based on the executive’s overall

performance, level of responsibility, pay grade, competitive compensation practices data and comparison to other company executives. Based on these criteria, our named executive officers received the following annual salary increases in fiscal year 2015:

Salary increases for the named executive officers were made effective July 1, 2014, the first day of the 2015 fiscal year. Our named executive officers' salary increases for fiscal year 2015 reflected a closing of the gap to the median market rate. Mr. Flynn's salary increase consisted of a 3.1% increase effective July 1, 2014, and a subsequent 16.7% increase effective March 1, 2015, which constitutes his aggregate salary increase for both fiscal year 2015 and also fiscal year 2016.

Annual Cash Bonus

Overview

We paid our named executive officers cash bonuses for fiscal year 2015 based on the attainment of company-wide, business unit and individual performance goals established at the beginning of the fiscal year.

For each executive officer, we establish a target bonus amount, which is initially expressed as a percentage of projected year-end annual base salary. This target bonus percentage ranges from 70% to 160% of base salary for the named executive officers. We also assign a percentage value to each bonus component of each named executive officer’s annual cash bonus plan and then determine the target bonus amount linked to each component. We establish these performance ranges to provide our named executive officers with a strong incentive to exceed the targets. The maximum bonus payment for our named executive officers is 200% of the target bonus level. There is no minimum payment level, and no award is payable if threshold performance goals are not achieved.

The compensation committee establishes and approves annual target bonus objectives and award opportunities for each of our named executive officers. In making these determinations, the compensation committee considers a variety of factors including market data, each officer’s relative level of responsibility, and the chief executive officer’s recommendations for executives other than himself. Our named executive officers participated in the discussions surrounding their bonus objectives so that they could provide input and understand the expectations of each bonus plan component, but they did not participate in the setting of the target award opportunities nor did they participate in the committee’s voting or deliberations regarding their individual compensation amounts. Each named executive officer receives a final version of his or her individualized bonus plan after it is approved by the compensation committee. Except in extraordinary circumstances, bonus objectives are not modified during the fiscal year, and no bonus objectives were modified for fiscal year 2015. Fiscal year 2015 bonus objectives were equitably adjusted as contemplated by the committee at the time these objectives were established to reflect the effects of the spin-off of our former Dealer Services business.

The compensation committee reviews the performance of each of our named executive officers relative to his annual fiscal year bonus plan objectives at its regularly scheduled August meeting, which is the first meeting following the end of our fiscal year. Based on this review, the compensation committee determines and approves the annual cash bonuses for our executive officers.

Named Executive Officers’ Fiscal Year 2015 Bonuses

Fiscal year 2015 target bonuses for the named executive officers were the same as a percentage of salary as in fiscal year 2014 except for Mr. Flynn. Mr. Flynn’s target bonus percentage was increased from 70% to 80% effective March 1, 2015 and his target bonus percentage for fiscal year 2015 was prorated based on eight months at 70% and four

months at 80%. Following the conclusion of fiscal year 2015, the compensation committee considered the performance of the company, the business units and the individual named executive officers for the 2015 fiscal year against the named executive officers’ bonus objectives, assessed which of the individual bonus targets were met, exceeded or not fully achieved, and approved cash bonuses as follows:

The bonus objectives were designed to reward achievement of goals that are aligned with the key components of our operational and strategic success, the degree to which the named executive officers have responsibility for overall company performance or individual business unit results, and to provide a set of common objectives that facilitate collaborative engagement. The compensation committee established the following financial goals for Mr. Rodriguez in August 2014, and for our named executive officers in September 2014:

Revenue Growth: 8.0% excluding the effect of foreign exchange rate movement as a target objective, 200% of target was to be awarded for revenue growth of 11.0% or greater, and 0% of target was to be awarded for revenue growth below 3.0%.

Operating Income Growth: 12.0% before taxes excluding one-time events other than acquisitions as a target objective, 200% of target was to be awarded for operating income growth of 16.0% or greater, and 0% of target was to be awarded for operating income growth below 6.0%.

Sales Growth (ES Worldwide): 8.0% as a target objective, 200% of target was to be awarded for sales growth of 11.0% or greater, and 0% of target was to be awarded for sales growth below 2.0%.

Business Unit Financial Performance: For Mr. Benjamin, successfully achieve net operating income and client retention target results for his business units.

Strategic Objectives:

We believe that long-term incentive 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 2015, long-term incentives were awarded in the form of performance-based stock and stock option grants. In special situations, we selectively award time-based restricted stock. The compensation committee selected these awards because they ensure that the overall long-term incentive program is closely tied to changes in stockholder value and the degree to which critical operating objectives are attained and support our talent retention objectives.

For all of our named executive officers except our chief executive officer, we target a long-term incentive compensation mix of 70% performance-based stock awards and 30% stock options. For fiscal year 2015, the compensation committee approved a long-term incentive mix for the chief executive officer of 60% performance-based stock awards and 40% stock options. The compensation committee believes that this incentive mix is appropriate for the chief executive officer because of his greater role in driving long-term stockholder value creation.

The compensation committee may also from time to time grant discretionary awards of time-based restricted stock to our executive officers. These awards are for special situations and are not considered in the target allocation of total long-term incentive compensation between performance-based stock awards and stock option grants. In fiscal year 2015, each of our named executive officers except for Mr. Rodriguez received a time-based restricted stock award, which is discussed below under “Time-Based Restricted Stock.”

As part of our annual market analysis of compensation data, we compare our long-term equity incentive grant values with competitive levels. We establish target long-term incentive award values and ranges for each executive level and set the midpoints of such ranges at the market median levels. The compensation committee reviews the target award values and ranges annually to ensure that the resulting awards remain generally consistent with our median compensation philosophy.

Prior to the beginning of each fiscal year, we analyze the target performance stock award and stock option grant levels to confirm that our desired target long-term incentive compensation values are appropriate in the context of the compensation studies referred to under “Compensation Review and Determination” above. When comparing our desired values to these compensation studies, we look at both equity elements in total.

The target long-term incentive mix approved for fiscal year 2015 grants is shown in the following chart:

At its June 2014 meeting, the compensation committee approved target awards of PSUs for all named executive officers, which were granted in September 2014 and will be earned and issued in fiscal year 2018. At its January 2015 meeting, the compensation committee approved stock

option grants for the named executive officers for fiscal year 2015. The PSU awards (based on the three-year target opportunity) and stock option grants for fiscal year 2015 are summarized in the table below:

Performance-Based Stock Awards

In fiscal year 2014, we introduced a PSU program based on financial objectives that are measured over a three-year performance period consisting of three one-year earnings per share performance goals. We believe the three-year PSU program will further the company’s longer term financial goals by tying a substantial portion of the total compensation opportunity to multi-year performance, and better promote talent retention by lengthening the total vesting period. The fiscal year 2015 target award opportunity under the PSU program, which was granted in September 2014, will be earned and issued in September 2017 based upon the achievement of earnings per share performance goals for fiscal years 2015, 2016 and 2017.

For purposes of our performance-based stock awards, earnings per share goals and corresponding target award ranges are typically established and communicated to our executive officers (including the named executive officers) in the first quarter of each respective fiscal year, and for the 2015 performance year were approved by the compensation committee in August 2014. After the conclusion of each fiscal year, the compensation committee confirms the earnings per share results and determines the award achieved for such fiscal year, as a percentage of target, based on these results by using linear interpolation between the lower and upper bounds of the applicable percentage range. Under the PSU program, after the

end of the three-year performance period, the award levels achieved as a percentage of target for each of the individual three fiscal years in the performance period will be averaged to obtain the overall award level earned and issued as a percentage of target. However, notwithstanding the achievement of earnings per share results, if the company’s total shareholder return is not positive for the three-year performance period, the total number of PSUs awarded may not exceed 100% of the target award. The PSU award earned will also 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 total 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.

In August 2014, the compensation committee established earnings per share growth goals and corresponding award ranges for the fiscal year 2015 target award under the PSU program. Our earnings per share growth for fiscal year 2015, as described above under “Fiscal Year 2015 Business Highlights,” was 12.5%, which resulted in an earned award level for the fiscal 2015 performance year in the amount of 120% of target. The following table shows the annual earnings per share targets, results and corresponding award levels achieved for fiscal years 2014 and 2015, in each case as a percentage of target:

Award levels achieved for each fiscal year in the three-year performance period are, as a percentage of target, 50% for threshold performance, 100% for target performance, 150% for stretch performance, and 0% for below threshold performance. The award level achieved within each range, as a percentage of target, is determined by linear interpolation between the lower and upper bounds. Dividends are paid only with respect to shares of restricted stock that have been issued.

Stock Options

We grant stock options to our executive officers based upon their pay grades (other than our chief executive officer). Stock options vest over four years. The grant level for each pay grade is determined based on our annual review of our long-term incentive compensation program. Our chief executive officer recommends to the compensation committee the number of stock options for our executive officers, other than himself. The compensation committee determined and approved stock option grants for our chief executive officer as part of a review of his entire compensation package based on the guidance of its independent compensation consultant, Cook & Co.

While the compensation committee can consider a stock option grant at any time for our executive officers, it has historically made its regularly scheduled stock option grants at its first meeting in January of each calendar year. The compensation committee generally sets its calendar of meetings in August of each year and we do not coordinate the January meeting date, or any other meeting dates, with any regularly scheduled announcement or corporate event. Additional stock option grants may be made to assist us in recruiting, promoting or retaining executive officers.

Time-Based Restricted Stock

The compensation committee may from time to time grant discretionary awards of time-based restricted stock to our executive officers. These discretionary grants assist us in the recruitment, promotion or retention of executive officers. In fiscal year 2015, the compensation committee approved special time-based restricted stock awards for Messrs. Siegmund, Benjamin, Flynn and Bonarti, with multi-year vesting periods ranging from two to five years. These awards were granted as part of the management succession planning process as we believe these executives are critical to retain for the future success of the company. The time-based restricted stock grants for fiscal year 2015 are summarized in the table below:

In addition to the compensation components discussed above and the opportunity to participate in the same Employees’ Savings-Stock Purchase Plan and health and welfare benefits available to our U.S. associates generally, we offer our executive officers retirement benefits, deferred compensation, limited perquisites, and change in control and severance protection. We believe these additional benefits are fair, competitive, consistent with our overall compensation philosophy and designed to ensure that we can effectively retain our executive officers as well as effectively compete for executive talent.

Retirement Benefits

All executive officers can participate in the Automatic Data Processing, Inc. Retirement and Savings Plan (our 401(k) plan) and are automatically enrolled in the Automatic Data Processing, Inc. Pension Retirement Plan (a tax-qualified, defined benefit, cash balance pension plan). These plans are generally available to all U.S. associates; however, the Pension Retirement Plan became closed to new participants as of January 2015. Our named executive officers also participate in the Supplemental Officers Retirement Plan,

which provides retirement benefits to our executive officers in excess of those generally available under our qualified cash balance pension plan. The Supplemental Officers Retirement Plan was closed to new participants beginning in January 2014.

Deferred Compensation

Executive officers may defer all or a portion of their annual cash bonuses into a deferred compensation account. We make this program available to our executive officers to be competitive, to facilitate the recruitment of new executives and to provide our executive officers with a tax efficient way to save for retirement. The company does not match deferrals by its named executive officers or otherwise contribute any amounts to the named executive officers’ deferred compensation amounts. Since the deferral accounts are made up of funds already earned by the executive officers, we do not consider the executive’s deferred account balances, or investment earnings or losses on such balances, when we make compensation decisions.

Perquisites

We provide each of our executive officers the use of automobiles leased by the company. Consistent with our policy towards all attendees, we pay for the spouses of our executive officers to accompany them to our annual sales President’s Club events. In addition, the ADP Foundation makes contributions that match the charitable gifts made by our executive officers up to a maximum of $20,000 per calendar year. Finally, company policy permits Mr. Rodriguez to occasionally use the company’s aircraft for personal travel in order to maximize his business availability and productivity, provided that he reimburses the company for the aggregate incremental cost incurred by the company in connection with any such personal use.

We did not make any tax gross-up payments to our named executive officers in fiscal year 2015, except for payments related to relocation expenses, which are available to all U.S. associates who participate in the company’s relocation program.

Change in Control Arrangements

The Automatic Data Processing, Inc. Change in Control Severance Plan for Corporate Officers is designed to: (i) retain our corporate officers (including the named

executive officers) and our staff vice presidents, and (ii) align their interests with our stockholders’ interests so that they can consider transactions that are in the best interests of our stockholders and maintain their focus without concern regarding how any such transaction might personally affect them.

Our Change in Control Severance Plan for Corporate Officers was amended on August 5, 2014 and is described in more detail below under “Potential Payments To Named Executive Officers Upon Termination or Change in Control.” Under this plan, our executive officers have separation entitlements that differ from one another. Mr. Rodriguez is entitled to severance equal to two times base salary and bonus upon termination of employment without cause or with good reason, while our other named executive officers are entitled to severance equal to one and one-half times base salary and bonus. We believe that a higher severance multiple for our chief executive officer is needed in order to attract the individual we believe is best suited for the position. Our chief executive officer is the individual the public and our stockholders most closely identify as the face of the company. He has the greatest individual impact on our success, and he faces the greatest personal risks when the company takes risks. Our Change in Control Severance Plan for Corporate Officers also provides that the vesting of all unvested equity awards would be accelerated under qualifying termination scenarios based on a “double trigger” in which payments of cash and vesting of equity awards occur only if termination of employment without cause or with good reason occurs during the two-year period after a change in control.

Corporate Officer Severance Plan

Effective May 6, 2015, ADP adopted the Corporate Officer Severance Plan for purposes of involuntary terminations other than for cause in the absence of a change in control. This plan is designed to: (i) attract and retain executive officers by a level of protection against involuntary job loss, (ii) provide an appropriate level of benefit to enable executive officers to transition to new employment, and (iii) secure restrictive covenants such as non-compete, non-solicitation, etc.

Our Corporate Officer Severance Plan is described in more detail below under “Potential Payments To Named Executive Officers Upon Termination or Change in Control.”

Under a qualifying termination, executive officers receive 18 months of base salary continuation (24 months for the CEO), prorated bonus for year of termination, and continuation of vesting of equity awards during the salary continuation period, subject to proration in respect of certain performance-based equity awards.

The severance formulas we use for executive officers are each designed to provide the level of temporary replacement income we feel is appropriate for that position.

Accounting and Tax Considerations

We consider accounting and tax implications when we design our equity-based and cash compensation programs and when we make awards or grants. In particular, Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation over $1,000,000 paid to “covered employees” (which are defined as our named executive officers, other than the chief financial officer). However, qualifying performance-based compensation is not subject to the deduction limit if certain requirements are met. We strive to make only those cash and equity-based awards and grants that qualify as performance-based compensation or that we otherwise can deduct when determining our corporate taxes. Our stockholders have previously approved incentive plans (including our 2008 Omnibus Award Plan) that are intended to permit the company to make equity-based awards and cash bonuses that may qualify as performance-based compensation for purposes of Section 162(m). However, the overriding consideration when evaluating the pay level or design component of any portion of our executives’ compensation is the effectiveness of the pay component and the stockholder value that management and the compensation committee believe the pay component reinforces. The compensation committee may, however, award compensation that is not deductible under Section 162(m) when, in the exercise of the committee’s judgment, it would be in the best interests of the company and its stockholders to do so. Compensation attributable to the vesting of time-based restricted stock does not qualify as performance-based compensation, and therefore may not be deductible to the extent it results in aggregate non-performance based compensation in excess of $1,000,000.

Clawback Policy

ADP adopted a Clawback Policy in fiscal year 2015 that provides the compensation committee with discretion to recover both cash and equity incentive compensation from all current and former executives. A recipient’s award may be forfeited and required to be recovered, as applicable, if the recipient engages in activity that is in conflict with or adverse to our interests, including but not limited to fraud or conduct contributing to any financial restatements or irregularities, or if the recipient violates a restrictive covenant.

Stock Ownership Guidelines

The compensation committee has established stock ownership guidelines to encourage equity ownership by our executive officers in order to reinforce the link between their financial interests and those of our stockholders. We set the stock ownership guidelines on the basis of each executive officer’s pay grade, expressed as a multiple of the executive officer’s base salary on the first day of the fiscal year. Stock ownership (as defined under the guidelines) consists of stock owned outright by the executive officer or beneficially through ownership by direct family members (spouses and/or dependent children), or stock owned through our Retirement and Savings Plan.

Under our stock ownership guidelines, Mr. Rodriguez is expected to own an amount of our stock equal in value to six times his base salary and Messrs. Siegmund, Benjamin, Flynn and Bonarti are expected to own an amount of our stock equal in value to three times their respective base salaries. Executive officers whose ownership levels are below the minimum required levels are required to retain as shares of common stock at least 75% of post-tax net gains on stock option exercises, and 75% of shares (net of taxes) received upon vesting of restricted stock. As of the end of fiscal year 2015, all named executive officers met the stock ownership guidelines, with the exception of Mr. Benjamin, who is making progress toward his stock ownership requirements.