What are the key performance metrics for executive bonuses in FY2006?

The key performance metrics for executive bonuses in FY2006 include earnings per share growth, revenue growth, achievement of a return on equity target, net operating income growth, sales targets, client retention targets, product creation and implementation objectives, "Employer of Choice" objectives, and other corporate compliance, leadership, and operational objectives. The applicability and weighting of these criteria vary for each Named Executive Officer based on their responsibilities.

When will the approved FY2006 base salaries and potential bonuses become effective?

The approved FY2006 base salaries will become effective in April 2006. Any earned bonuses for FY2006 will be determined and paid in early fiscal year 2007, after the performance objectives have been assessed at the end of FY2006.

What significant change was made to ADP's by-laws?

ADP amended its by-laws to change the voting requirement for the election of directors. Directors will now generally be elected by the vote of the majority of the shares represented at a meeting where a quorum is present. However, if the number of nominees exceeds the number of directors to be elected, directors will be elected by a plurality vote.

Is there any information on the departure of any principal officers?

Yes, the filing reports the retirement of Mr. Joseph A. Califano, Jr., from the Registrant's Board of Directors on August 11, 2005. He had served as a director since 1982. There is no mention of the departure of other principal officers in this report.

ADP 8-K: Leadership Changes, Material Agreements & More

Summary

This 8-K filing from Automatic Data Processing, Inc. (ADP) on August 12, 2005, primarily concerns executive compensation and corporate governance. The Compensation Committee approved the fiscal year 2006 base salaries and performance criteria for cash bonuses for the Named Executive Officers. These criteria are diverse, encompassing metrics such as earnings per share growth, revenue growth, return on equity, net operating income, sales targets, client retention, product development, and "Employer of Choice" objectives, reflecting a comprehensive approach to incentivizing leadership performance. Additionally, the filing notes the retirement of a long-standing director, Mr. Joseph A. Califano, Jr., and an amendment to the company's by-laws. The by-law amendment clarifies the voting requirements for the election of directors, moving towards a majority vote standard unless the number of nominees exceeds the available board seats, in which case a plurality vote will apply. These changes are important for understanding the company's governance structure and executive incentives.

Key Highlights

1Fiscal Year 2006 base salaries for Named Executive Officers were approved, with effective dates in April 2006.
2Performance criteria for Fiscal Year 2006 cash bonuses were established, including EPS growth, revenue growth, ROE, net operating income, sales, client retention, and product objectives.
3Maximum potential bonus amounts were outlined for each Named Executive Officer, ranging from $422,000 to $2,640,000.
4The Compensation Committee retains discretionary power to adjust bonuses downward.
5Director compensation arrangements, effective November 8, 2005, were approved.
6Mr. Joseph A. Califano, Jr., a director since 1982, retired from the Board of Directors.
7The company's by-laws were amended to modify the voting requirements for director elections, generally requiring a majority vote.

AUTOMATIC DATA PROCESSING INC 8-K Report, Material Agreement (Aug 12, 2005)

Summary

Key Highlights

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