AUTOMATIC DATA PROCESSING INC

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 2024, 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. This approach follows the same LTI mix and design that was introduced in fiscal year 2023 (granted September 2022), following an in-depth review the committee conducted of the overall incentive structure in fiscal year 2022, which was informed by investor observations and input from the committee’s independent compensation consultant. 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 to changes in stockholder value and the degree to which critical operating objectives are attained, and supports our talent retention objectives.

The committee may also from time to time grant discretionary awards of RSUs to our executive officers. These awards are for special situations to assist us in the recruitment, promotion or retention of executive officers

and are not considered in the target allocation of total long-term incentive compensation between annual PSU and RSU awards. In fiscal year 2024, none of the NEOs received a discretionary RSU award.

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 committee reviews the target award values 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 PSU and RSU 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 2024 grants is shown in the following chart:

Compensation Discussion and Analysis

At its June 2023 meeting, the committee approved target awards of PSUs and RSUs for all NEOs for fiscal year 2024, which were granted in September 2023. The PSU awards (based on the three-year target opportunity) will be earned

and issued following the end of the three-year performance period in fiscal year 2026. The PSUs and RSUs granted for fiscal year 2024 are summarized in the table below:

PSU Awards

Our PSU program is based on financial objectives that are measured over a three-year performance period consisting of three one-year performance goals. The committee believes that the current PSU program’s combined effect of (i) measuring performance annually over the three-year performance period enables setting rigorous targets that drive accountability for the achievement of core financial metrics that are critical building blocks for sustained business success and (ii) modifying the actual number of PSUs eligible to be earned based on our three-year relative TSR performance, provides the most business-focused, shareholder-aligned and holistic assessment of our long-term trajectory and performance. We believe that the three-year PSU program will further the company’s long-term financial goals by tying a substantial portion of the total compensation opportunity to multi-year performance and better promote talent retention by imposing a meaningful total vesting period.

For PSU awards granted in fiscal year 2022, the three one-year performance periods are measured solely against adjusted net income goals, with a maximum payout opportunity of 150% of target. For PSU awards granted in fiscal years 2023 and 2024, adjusted net income is used as the primary performance metric, weighted 67%, and revenue ex-ZMPT is used as the second performance metric, weighted 33%. The combination of the two metrics is intended to promote focus on both the top line and bottom-line performance of the business. Notably, the PSU revenue metric differs materially from that

used in our annual cash bonus plan because it excludes zero-margin benefits pass-throughs, and therefore avoids metric duplication.

The fiscal years 2023 and 2024 PSU award performance design also includes a relative TSR (“rTSR”) metric that may modify the final payout (by +/- 20%) at the end of the respective full three-year period based on performance versus the S&P 500; the inclusion of the rTSR metric is intended to provide accountability for the company’s stock price performance over the full three-year performance period. For PSUs granted in fiscal years 2023 and 2024, the maximum payout opportunity is 200% of target, inclusive of the rTSR modifier, in order to align with the most prevalent peer market practices and encourage executives to achieve stretch goals. However, payout will be capped at the target number of shares if the company’s absolute 3-year TSR is negative (applicable to all PSU awards).

For purposes of our PSU awards, the performance goals and corresponding target award ranges are typically established and communicated to our executive officers (including the NEOs) in the first quarter of each respective fiscal year. After the conclusion of each fiscal year, the committee confirms the performance 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

Compensation Discussion and Analysis

applicable performance period will be averaged to obtain the overall award level earned and issued as a percentage of target. However, notwithstanding the achievement of performance results, if the company’s absolute TSR is not positive for the three-year performance period, the total number of PSUs awarded may not exceed 100% of the target award. In addition, as discussed, there is an rTSR modifier for the fiscal years 2023 and 2024 PSU grants.

The PSU award earned will 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 applicable 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.

Our adjusted net income growth for fiscal year 2024, as described in further detail above under “2024 Incentive Compensation Performance Metrics,” was 11.6%, which resulted in an earned award level for the fiscal 2024 performance year in the amount of 111% of target, specifically related to the third of three tranches of the PSU award granted for fiscal year 2022 in September 2021. For the fiscal year 2023 PSU award granted in September 2022 and the fiscal year 2024 PSU award granted in September 2023, the adjusted net income growth achievement of 11.6% resulted in an earned award level in the amount of

117% of target, which is applicable to the second of three tranches for the fiscal year 2023 PSU award, and the first of three tranches for the fiscal year 2024 PSU award, and is weighted 67% for both awards. The different % of target earned for the fiscal year 2024 adjusted net income growth is the result of a different maximum payout opportunity for the PSU award granted in September 2021 compared to the PSU awards granted in September 2023 and September 2024, as further described below.

Our revenue ex-ZMPT growth for fiscal year 2024 as described in further detail above under “2024 Incentive Compensation Performance Metrics,” was 7.48%, which resulted in an earned award level for the fiscal 2024 performance year in the amount of 99% of target. This achievement percentage applies to the second of three tranches of the PSU award granted in September 2022, and the first of three tranches of the PSU award granted in September 2023, and is weighted 33% for both awards.

These adjusted net income growth and revenue ex-ZMPT growth goals were established consistent with the committee’s long-standing methodology in setting such goals and as such, align to the financial earnings guidance the company communicated in July 2023 for fiscal year 2024 and reflect ADP’s expectations and assumptions at that time.

Fiscal Year 2022 PSU Design Performance Table

The following table shows the annual targets, results and award levels achieved for fiscal years 2022, 2023 and 2024, as applicable to the outstanding PSU awards granted in September 2021, 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 ADP stock that have been issued in connection with PSUs earned. The end of fiscal year 2024 marks the end of the three-year performance period for PSU awards granted in fiscal year 2022. Based on the average of the three fiscal years, these awards earned a payout percentage of 124%.

Compensation Discussion and Analysis

Fiscal Years 2023 and 2024 PSU Design Performance Table

Subject to final performance assessment based on the three-year rTSR modifier (as discussed below), the following table shows the annual targets, results and awards levels achieved for fiscal 2024, as applicable to outstanding PSU awards granted in September 2022 and September 2023, 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, 175% 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 ADP stock that have been issued in connection with PSUs earned.

Relative TSR Modifier

PSU awards granted in fiscal years 2023 and 2024 (and on a go-forward basis under our current award design), are subject to an rTSR modifier based on performance against the S&P 500 over the full three-year performance period. The S&P 500 was chosen because the index consists of a broad group of companies that represent investors’ alternative capital investment opportunities, thereby aligning the PSU payout opportunity to the long-term investment experience of our stockholders. The rTSR measurement is based on the average of the last twenty trading days ending on the start and end of the three-year period (beginning July 1 and ending June 30). Relative performance against the S&P 500 may adjust the final three-year average payout percentage, based on achievement of adjusted net income growth and revenue ex-ZMPT growth, between 80% and 120%, as shown in the table below.

The maximum payout opportunity for PSU awards inclusive of the modifier adjustment is capped at 200% of target, however, the payout opportunity is capped at 100% if our company’s absolute three-year TSR is negative.

As fiscal year 2023 marked the first year under the current PSU program design inclusive of the rTSR modifier, the final rTSR assessment for the awards granted September 2022 and September 2023 will not be completed until June 30, 2025 and June 30, 2026 respectively.

Time-Based Restricted Stock Units

For fiscal year 2024, we granted RSUs to our executive officers, which vest ratably over three years, and allow for a portion of our NEOs’ LTI compensation to be more predictable from a realized value perspective, while being directly tied to the shareholder experience. We determine target award ranges based on our annual review of our long-term incentive compensation programs.

The committee may, from time to time, grant RSU awards to our executive officers that are outside of the annual grant cycle. These grants assist us in the recruitment, promotion and retention of executive officers and, while used only occasionally, are important in building our leadership team and succession strategy. In fiscal year 2024, none of the NEOs were granted RSUs outside of the annual grant cycle.

Compensation Discussion and Analysis