DEF 14A of Paychex Inc
Filed Sep 4, 2026 · FY20260001193125-26-382805
HOW TO VOTE YOUR SHARES
| Page | | | 1 | PROXY STATEMENT SUMMARY | | 5 | PROPOSAL 1: ELECTION OF DIRECTORS FOR A ONE-YEAR TERM | | 12 | DIRECTOR COMPENSATION FOR THE FISCAL YEAR ENDED MAY 31, 2026 | | 16 | BENEFICIAL OWNERSHIP OF PAYCHEX COMMON STOCK | | 18 | CORPORATE GOVERNANCE | | 18 | Role of the Board | | 18 | Corporate Responsibility | | 19 | Board Leadership Structure | | 20 | Nomination Process | | 21 | Board Oversight of Risk | | 22 | Board Meetings and Committees | | 25 | Policy on Transactions with Related Persons | | 25 | Transactions with Related Persons | | 26 | Insider Trading Policy | | 26 | Stockholder Engagement | | 27 | Communications with the Board of Directors | | 27 | CODE OF BUSINESS ETHICS AND CONDUCT | | 28 | PROPOSAL 2: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION |
ELECTION OF DIRECTORS FOR A ONE-YEAR TERM
ELECTION OF DIRECTORS FOR A ONE-YEAR TERM
ELECTION OF DIRECTORS FOR A ONE-YEAR TERM
| What am I voting on? | Voting Recommendation | | Stockholders are being asked to elect ten director nominees for a one-year term. This section includes information about the Board and each director nominee. | The Board recommends a vote FOR each of the ten director nominees. |
ELECTION OF DIRECTORS FOR A ONE-YEAR TERM
The Board is elected by the stockholders to oversee the overall success of the Company, review its operational and financial capabilities, and periodically assess its long-term strategic objectives. The Board serves as the ultimate decision-making body of the Company, except for those matters reserved for stockholders. The Board selects and oversees the members of senior management who are charged by the Board with conducting the day-to-day business of the Company. The Board acts as an advisor to senior management and ultimately monitors management’s performance.
Election Process
Election Process The Company’s Amended and Restated By-Laws (“By-Laws”) provide for the annual election of directors. The By-Laws provide that each director is elected by a majority of the votes cast for the director at any meeting held for the election of directors at which a quorum is present, and the director is running unopposed. If a nominee that is an incumbent director does not receive a majority of the votes cast in an uncontested election, such director must offer his or her resignation to the Board. The Nominating and Governance (“N&G”) Committee considers such offer and will make a recommendation to the Board on whether to accept or reject the resignation. The Board then considers the N&G Committee’s recommendation and will determine whether to accept such offer. The Board will disclose its decision and the rationale behind it within 90 days of the certification of the election results.
2026 Nominees for Director
2026 Nominees for Director There are ten nominees for election as director, as listed on the following pages. Each of the nominees is a current member of the Board. As previously announced by the Company, Ms. Wilson will not stand for reelection as a director, and her current term will expire at the Annual Meeting. The ten persons listed have been nominated for election to the Board by the N&G Committee. The nominees, except for Messrs. Gibson and Mucci, are independent under The Nasdaq Stock Market LLC (“Nasdaq”) director independence standards. If elected, each nominee will hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. We believe that all the nominees will be available to serve as a director. However, if any nominee should become unable to serve, the named proxy holders may exercise discretionary authority to vote for substitute nominees proposed by the Board. The Board believes its mix of director tenure provides meaningful diversity of perspective and experience. Newer directors contribute fresh viewpoints and external insights, while longer-tenured directors offer continuity and a deep understanding of Paychex’s business, strategy, and culture. Together, this balance supports effective oversight and informed decision-making. Due in part to stockholder feedback, board refreshment continues to be an important consideration of our Board. For more information on our nomination process, refer to the Corporate Governance section of this proxy statement.
2026 Nominees for Director
| The Board recommends the election of each of the director nominees identified on the following pages. Unless otherwise directed, the named proxy holders will vote the proxy FOR the election of each of these director nominees. |
Summary of Director Nominees
Summary of Director Nominees The Company seeks to maintain a Board comprised of a mix of perspectives, experiences, skills, and backgrounds to reflect the multi-faceted nature of the business environment in which the Company operates. For purposes of Board composition, the Board, guided by the N&G Committee, considers, among other factors that the Board determines relevant, a nominee’s demonstrated business judgment, leadership abilities, integrity, prior experience, education, training, and relationships. The N&G Committee regularly evaluates Board composition, and as a Company, we are dedicated to ongoing Board refreshment so that the Board’s collective skills and viewpoints remain aligned with the evolving demands of our business landscape. Our director nominees are accomplished professionals, with diverse areas of expertise, who are well-equipped to oversee the success of the business and effectively represent the interests of stockholders. Our director nominees:
Summary of Director Nominees
| • | are seasoned leaders who possess high personal and professional ethics and share the values of the Company; |
Summary of Director Nominees
| • | are highly accomplished in their fields and have served as directors and officers in a diverse range of companies, including technology, financial services, and payment companies, among others; |
Summary of Director Nominees
| • | strengthen our Board’s oversight capabilities by having varied lengths of tenure that provide historical and new perspectives about our Company; and |
Summary of Director Nominees
| • | bring extensive and varied experience in strategic planning, business development, international business, mergers and acquisitions, and go-to-market strategies, among others. |
Summary of Director Nominees
The Board has identified the qualifications, skills, experience, and attributes that are important for effective oversight of the Company in light of its business and operating environment. The Board believes the director nominees’ diverse and complementary backgrounds contribute to a well-functioning and effective Board. Below is a summary to highlight some but not all the important skills our director nominees bring to the Board.
Summary of Director Nominees
| | Skills | | | | | | | | | | | | | Capital Markets Literacy | ⬤ | | | ⬤ | ⬤ | | | | ⬤ | ⬤ | | | Industry Knowledge | ⬤ | ⬤ | ⬤ | | ⬤ | ⬤ | | | ⬤ | ⬤ | | | Financial Literacy | ⬤ | ⬤ | | ⬤ | ⬤ | ⬤ | | ⬤ | | ⬤ | | | Global Experience | | ⬤ | ⬤ | ⬤ | ⬤ | ⬤ | ⬤ | | ⬤ | ⬤ | | | Leadership Experience | ⬤ | ⬤ | ⬤ | ⬤ | ⬤ | ⬤ | ⬤ | ⬤ | ⬤ | ⬤ | | | Product Marketing | ⬤ | | ⬤ | | | | | ⬤ | ⬤ | | | | Risk Management | ⬤ | ⬤ | | ⬤ | | ⬤ | ⬤ | ⬤ | ⬤ | ⬤ | | | Technology and Artificial Intelligence Experience | | | ⬤ | ⬤ | ⬤ | | ⬤ | ⬤ | ⬤ | ⬤ |
Director Nominee Biographies
Director Nominee Biographies The following is summary information about each of our ten director nominees. The Board recommends that our shareholders elect all ten director nominees listed below at the Annual Meeting. Each nominee is elected annually by a majority of votes cast in uncontested elections.
Director Nominee Biographies
| Martin Mucci CHAIRMAN OF THE BOARD Director since 2010 Age: 66 Board Committees: • Executive (Chair) | Career Highlights: • Paychex, Inc. • Chairman of the Board and CEO, December 2021 – October 2022 • President and CEO, September 2010 – December 2021 • Senior Vice President (“SVP”), Operations, October 2002 – September 2010 • Frontier Communications of Rochester (a telecommunications company), January 1998 – December 2001 • President, Telephone Operations • President and CEO of Frontier Telephone of Rochester Other Current Public Company Directorships: • Cintas Corporation (a uniform rental and facility services company), since April 2023 • Board Member, Audit and Nominating and Governance committees Former Public Company Directorships: • NCR Corporation (a software, consulting and technology company), April 2021 – October 2023 • Cbeyond (a telecommunications company focused on small businesses), February 2009 – July 2014 Other Professional Experience and Community Involvement: • Royal Oak Realty Trust, Board Member and Audit Committee, since May 2025 • St. John Fisher University, Trustee Emeritus, since 2014 • Madison Dearborn Partners (a private equity firm), Business and Government Software and Services Advisory Team, Member, since 2013 Key Experience and Qualifications: The Board has concluded that Mr. Mucci is qualified to lead the Board due to his experience providing day-to-day leadership as the former President and CEO of Paychex, giving him extensive knowledge of the Company, its operations, challenges, and opportunities. In addition, Mr. Mucci’s educational background and senior leadership experience provide him with strong financial literacy. |
Director Nominee Biographies
| Thomas F. Bonadio INDEPENDENT Director since 2017 Age: 77 Board Committees: • Audit (Chair) • Corporate Development Advisory • Investment | Career Highlights: • The Bonadio Group (accounting firm) • Founder and Chairman of the Board of Directors, since September 1978 • Impact Capital, (a venture capital firm), since June 2017 Former Public Company Directorships: • CurAegis Technologies, Inc. (a health and wellness company), November 2010 – March 2021 Other Professional Experience and Community Involvement: • Viridi (an energy storage company), Board Member, since March 2018 • Royal Oak (a private real estate investment trust), Board Member and Audit Committee Chair, since June 2014 • Conceptus, Inc. (a medical device company), Board Member and Audit Committee Chair, June 2003 to June 2013 Key Experience and Qualifications: The Board has concluded that Mr. Bonadio is qualified to serve as a director of the Company due to his strong background in finance and business, his entrepreneurial experience, and his knowledge of the Certified Public Accountant community. Mr. Bonadio is a successful entrepreneur whose experience building his own business is representative of many clients Paychex serves today. He also brings a high degree of financial literacy obtained from his years in the financial services industry, and his ability to assess financial performance of other companies through the review and understanding of financial statements. This financial expertise is a great benefit to the Board and its committees. |
Director Nominee Biographies
| Joseph G. Doody INDEPENDENT Director since 2010 Age: 74 Board Committees: • Compensation & Leadership (Chair) • Investment • Nominating and Governance | Career Highlights: • Staples, Inc., (an office products company) • Vice Chairman February 2014 until his retirement in September 2017 • President, North American Delivery, from March 2002 to February 2014 • Various positions, November 1998 to March 2002 Other Current Public Company Directorships: • Casella Waste Systems, Inc. (a waste management company), since 2004 Former Public Company Directorships: • Virtusa Corporation (a global technology company), February 2017 – February 2021 Other Professional Experience and Community Involvement: • Foundation Board at The College at Brockport • Chair 2013 – 2017, Emeritus since 2019 Key Experience and Qualifications: The Board has concluded that Mr. Doody is qualified to serve as a director of the Company due to his significant leadership and international experience. His long tenure in management of a large division of a multinational company enables him to provide our Board with important operational expertise. In addition, his deep knowledge of small- to medium-sized businesses brings a thorough understanding of the risks and opportunities affecting the Company’s clients and potential clients. Mr. Doody also has extensive experience in strategic planning and business development, which allows him to provide valuable input into the Company’s plans for market growth. |
Director Nominee Biographies
| John B. Gibson PRESIDENT AND CHIEF EXECUTIVE OFFICER Director since 2022 Age: 60 Board Committees: • Corporate Development Advisory • Executive | Career Highlights: • Paychex, Inc. • President and CEO, since October 2022 • President and Chief Operating Officer (“COO”), December 2021 – October 2022 • Senior Vice President of Service, May 2013 – December 2021 • Convergys (now Concentrix) (a global technology company) • President, HR Management division, June 2004 – June 2010 • Ameritech Corporation (now AT&T) (a telecommunications company) • Vice President, Sales and Service, April 1989 – November 1999 Other Current Public Company Directorships: • ManpowerGroup (a staffing and workforce solutions company), • Board Member, People, Culture, and Compensation Committee since August 2026 Key Experience and Qualifications: The Board has concluded that Mr. Gibson is qualified to serve as a director of the Company due to his leadership and experience. Mr. Gibson has been a key leader in the Company’s digital expansion, its service transformation, and the expansion of its professional employer organization and HR advisory services. His deep understanding of the Company’s market and focus on driving innovative technology and HR advisory solutions for the Company’s approximately 840,000 total customers make him a valuable addition to the Board. |
Director Nominee Biographies
| J. Michael Hansen INDEPENDENT Director since 2026 Age: 58 Board Committees: • Audit • Corporate Development Advisory(1) | Career Highlights: • Cintas Corporation (a uniform rental and facility services company) • Executive Vice President and CFO, July 2018 – May 2025 • Senior Vice President and CFO, October 2016 – June 2018 • Vice President – Finance and CFO, February 2015 – September 2016 • Vice President and Treasurer, June 2010 – January 2015 Other Professional Experience and Community Involvement: • Catholic Inner-City Schools Education Fund • Board Member since December 2025 • Greater Cincinnati Tennis Community Authority • Board Member since October 2025 • Mason, Ohio Port Authority • Board Member since September 2019 Key Experience and Qualifications: The Board has concluded that Mr. Hansen is qualified to serve as a director of the Company due to his deep financial expertise, public company accounting experience, international business leadership, and extensive tenure as a chief financial officer. Mr. Hansen brings valuable insight to the Board’s oversight of the Company’s financial reporting, risk management, and governance practices. His experience overseeing global operations, evaluating and executing merger and acquisition transactions, reviewing financial statements, and assessing business performance has resulted in a high degree of financial literacy and strategic perspective that benefits the Board and its committees. |
Director Nominee Biographies
| (1) Mr. Hansen was appointed as a member of the Corporate Development Advisory Committee effective July 16, 2026. |
Director Nominee Biographies
| Pamela A. Joseph INDEPENDENT Director since 2018 (previously served from 2005 – 2017) Age: 67 Board Committees: • Compensation & Leadership • Corporate Development Advisory • Executive • Nominating and Governance (Chair) | Career Highlights: • Xplor Technologies (a SaaS company) • Chief Executive Officer, October 2022 – December 2025 • Executive Chair, 2018 – 2025 • Advent International (a private equity firm) • Operating Partner, since 2018 • Total System Services, Inc., (a financial services company) • President, COO, and Board Member, May 2016 – September 2017 • U.S. Bancorp Payment Services (a financial services company) • Vice Chair, December 2004 – June 2015 • Chair, Elavon (formerly NOVA Information Systems, Inc.), a wholly owned subsidiary of U.S. Bancorp, December 2004 – June 2015 Other Current Public Company Directorships: • TransUnion (a global information and insights company) • Board Chair, since 2019 • Audit Chair, July 2015 – July 2019 • Board Member, since 2015 • Adyen N.V.(Euronext Amsterdam Stock Exchange) (a Netherlands-based payments platform business) • Board Member, Audit Committee, since May 2019 Key Experience and Qualifications: The Board has concluded that Ms. Joseph is qualified to serve as a director of the Company due to her extensive executive experience in the financial services and payment industries. Her wealth of technology experience brings insight to the Board and its committees. In addition, her experience with major acquisitions, board experience, and international expansion allows her to provide valuable input to the Company’s growth plans. |
Director Nominee Biographies
| Theresa M. Payton INDEPENDENT Director since 2023 Age: 59 Board Committees: • Audit | Career Highlights: • Fortalice Solutions, LLC (a security consulting company) • Founder, President, and Chief Executive Officer, since September 2008 • Dark Cubed (a cybersecurity solutions company) • Co-founder, Board member, January 2014 – September 2022 • Executive Office of the President at the White House • Chief Information Officer, May 2006 – September 2008 • Bank of America (a financial institution) • Senior Vice President, September 2004 – April 2006 • Wachovia (a financial institution) • Senior Vice President, July 1995 – September 2004 Other Professional Experience and Community Involvement: • Sumitomo Mitsui Banking Corporation – SMBC Group Americas Division, Independent Director, since January 2024 • Major-Payton School of Business, Immaculata University, Co-Founder, since May 2025 • Transformation Innovation Advisory Board of UniCredit S.p.A., Member, January 2019 – August 2022. • Public Sector Advisory Board, Member, CyberArk (a publicly traded cybersecurity company), January 2019 – December 2021 Key Experience and Qualifications: The Board has concluded that Ms. Payton is qualified to serve as a director of the Company due to her significant technology and cybersecurity expertise and experience as an entrepreneur. Her business acumen, intense focus on the needs of clients, and her ability to provide sound governance insights on digital and security risks make her a valuable contributor to the Board. |
Director Nominee Biographies
| Kevin A. Price INDEPENDENT Director since 2021 Age: 66 Board Committees: • Audit • Nominating and Governance | Career Highlights: • KAP Holdings, LLC (an equipment wholesale company) • Founder and President, since 2006 • PartScription TM (an ecommerce company) • Founder and President, July 2010 – June 2025 • Sears Holdings Corporation (a retail company) • Vice President of the Customer Care Network, August 2000 – August 2006 • Ameritech Corporation (a telecommunications company) • Vice President, Planning and Administration, June 1999 – July 2000 • Vice President, Sales and Operations, July 1996 – June 1999 • AC Nielsen (a market research company) • Senior Vice President, Operations, September 1991 – June 1998 Other Professional Experience and Community Involvement: • Link Unlimited, Member Emeritus, Board of Directors, since August 1996 • Oak Park River Forest Infant Welfare Society, since 2023 • College of Business, Advisory Council Member, Drake University, 2017 – 2020 • Brennan School of Business, Dominican University, Advisory Board Member, 2005 – 2018 Key Experience and Qualifications: The Board has concluded that Mr. Price is qualified to serve as a director of the Company due to his extensive experience as an entrepreneur and significant executive leadership and e-commerce experience. Mr. Price is a strategic leader who has provided agile leadership to help drive business success. His experience is a great benefit to the Board and its committees. |
Director Nominee Biographies
| Joseph M. Tucci INDEPENDENT Lead Independent Director Director since 2000 Age: 79 Board Committees: • Compensation & Leadership • Executive • Nominating and Governance | Career Highlights: • Bridge Growth Partners, LLC (a private equity firm) • Co-founder and Chairman of the Board of Directors, since 2013 • EMC Corporation (“EMC”) (a provider of data-storage systems) • Chairman of the Board of Directors, January 2006 – September 2016 • Chief Executive Officer, January 2001 – September 2016 • VMWare, Inc. (a cloud infrastructure company) • Chairman of the Board of Directors, April 2007 – September 2016 Other Current Public Company Directorships: • Motorola Solutions, Inc. (a public safety and enterprise security company), since May 2017 Former Public Company Directorships: • GTY Technology Holdings, Inc. (a technology company), September 2016 – July 2022 Other Professional Experience and Community Involvement: • Syniti, (an enterprise data management solutions company), Board Member, August 2017 – November 2024 Key Experience and Qualifications: The Board has concluded that Mr. Tucci is qualified to serve as a director of the Company due to his extensive executive leadership experience as CEO of EMC. Mr. Tucci has spent over 40 years in the technology industry in senior roles at large, complex, and global technology companies. His experience leading EMC through a period of dramatic revitalization, growth and market share gains, and new product introductions enables him to share knowledge of the challenges a company faces due to rapid changes in the marketplace. |
Director Nominee Biographies
| Joseph M. Velli INDEPENDENT Director since 2007 Age: 68 Board Committees: • Compensation & Leadership • Corporate Development Advisory (Chair) • Executive • Investment (Chair) | Career Highlights: • ConvergEx Group, LLC (a provider of software platforms and technology-enabled brokerage and investment services) • Chairman of the Board and Chief Executive Officer, October 2006 – December 2013 • Director, October 2006 – May 2014 • The Bank of New York (a financial institution) • Senior Executive Vice President and a member of the Senior Policy Committee, February 1984 until October 2006 Other Current Public Company Directorships: • Cognizant Technology Solutions Corp. (an AI builder and technology services provider), since December 2017 • Computershare Ltd. (Australian Stock Exchange) (a financial services company), since October 2014 Former Public Company Directorships: • AssetMark Financial Holdings (a wealth advisory platform), May 2020 – September 2024 Other Professional Experience and Community Involvement: • William Paterson University, Board of Trustees, Member, since June 2017 • Lovell Minnick Partners (a venture capital and private equity firm), Advisory Council, Member, since October 2016 Key Experience and Qualifications: The Board has concluded that Mr. Velli is qualified to serve as a director of the Company due to his extensive experience with securities servicing, financial technology, capital markets, business to business, sales and marketing, and mergers and acquisitions matters, as well as his public board experience. He plays a key role in the Board’s discussions of the Company’s investments and liquidity. Mr. Velli has extensive experience with acquisitions and business services, providing valuable insights on potential growth opportunities for the Company. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Fiscal 2026 Director Compensation Table
Fiscal 2026 Director Compensation Table The table below presents the total compensation received from the Company by all non-employee directors for the fiscal year ended May 31, 2026 (“fiscal 2026”).
Fiscal 2026 Director Compensation Table
| Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Stock Options(2) | All Other Compensation(3) | Total | | Martin Mucci | $195,000 | $136,322 | $136,251 | $— | $467,573 | | Thomas F. Bonadio | $147,500 | $115,524 | $115,611 | $— | $378,635 | | Joseph G. Doody | $145,000 | $115,524 | $115,611 | $— | $376,135 | | B. Thomas Golisano(4) | $71,875 | $— | $— | $16,615 | $88,490 | | J. Michael Hansen(5) | $22,396 | $69,376 | $69,373 | $— | $161,145 | | Pamela A. Joseph | $148,125 | $115,524 | $115,611 | $— | $379,260 | | Theresa M. Payton | $107,500 | $115,524 | $115,611 | $— | $338,635 | | Kevin A. Price | $117,500 | $115,524 | $115,611 | $— | $348,635 | | Joseph M. Tucci | $172,500 | $115,524 | $115,611 | $— | $403,635 | | Joseph M. Velli | $132,500 | $115,524 | $115,611 | $— | $363,635 | | Kara Wilson(6) | $115,000 | $115,524 | $115,611 | $— | $346,135 |
Fiscal 2026 Director Compensation Table
| (1) The amounts reported in this column reflect the annual cash compensation paid to the directors during fiscal 2026, whether or not such fees were deferred. Annual cash compensation for the directors who own less than 5% of the outstanding shares of the common stock of the Company is comprised solely of annual retainers, which are paid in quarterly installments. Any non-employee director beneficially owning more than 5% of the outstanding shares of common stock of the Company may elect to receive their total compensation for serving on the Board or Committees thereof in cash in quarterly installments as opposed to in the form of a mix of cash and equity in the Company. Mr. Golisano, who owns more than 5% of the outstanding shares of the Company’s common stock, elected to receive his total compensation for fiscal 2026 in cash. |
Fiscal 2026 Director Compensation Table
| (2) The amounts reported in these columns reflect the grant-date fair value of time-based restricted stock units (“RSUs”) and stock option awards, respectively, and are computed in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The amounts do not reflect whether the recipient has actually received a financial gain from these awards (such as a lapse in the restrictions on time-based RSUs or an exercise of stock options). |
Fiscal 2026 Director Compensation Table
| As of May 31, 2026, each non-employee director had the following equity awards outstanding: |
Fiscal 2026 Director Compensation Table
| Director | Stock Awards (Shares) | Stock Options (Shares) | | Martin Mucci | 1,049 | 908,045 | | Thomas F. Bonadio | 889 | 54,948 | | Joseph G. Doody | 889 | 32,288 | | J. Michael Hansen | 624 | 2,435 | | Pamela A. Joseph | 889 | 43,089 | | Theresa M. Payton | 889 | 12,164 | | Kevin A. Price | 889 | 18,566 | | Joseph M. Tucci | 889 | 60,764 | | Joseph M. Velli | 889 | 50,544 | | Kara Wilson(6) | 889 | 50,544 |
Fiscal 2026 Director Compensation Table
| (3) The amount reported in this column reflects a retirement gift from the Company to Mr. Golisano for his years of service on the Board. |
Fiscal 2026 Director Compensation Table
| (4) Mr. Golisano stepped down from the Board effective July 9, 2025. |
Fiscal 2026 Director Compensation Table
| (5) Mr. Hansen was appointed to the Board in January 2026. |
Fiscal 2026 Director Compensation Table
| (6) As previously announced by the Company, Ms. Wilson will not stand for reelection as a director, and her current term will expire at the Annual Meeting. |
Primary Responsibilities
| • | Design and administer the Company’s executive and director compensation programs to ensure furtherance of the Company’s overall compensation objectives; |
Primary Responsibilities
| • | Evaluate and determine compensation for the CEO and senior executive officers and recommend director compensation to the Board; |
How Pay is Tied to Company Performance
| • | Performance-based equity awarded to our NEOs constituted 60% of the total long-term incentive value at target and is subject to a three-year performance period. |
How Pay is Tied to Company Performance
| • | Target compensation for the annual incentive program and annual grants of performance-based stock awards is generally established at the beginning of the performance period by the C&L Committee. NEOs have an opportunity to earn actual compensation that varies from target based on achievement against pre-established performance metrics. |
How Pay is Tied to Company Performance
| • | The financial measures used as performance targets are linked directly to our annual and long-term strategic plans that are reviewed and approved by the Board. |
How Pay is Tied to Company Performance
| • | The fiscal 2026 annual incentive program performance metrics consisted of new business revenue and service revenue as well as operating income, net of certain items(1). |
How Pay is Tied to Company Performance
| • | The fiscal 2026 performance-based equity award metrics consisted of service revenue, operating income, net of certain items(1), and relative total shareholder return (“TSR”) as compared to the S&P 500. |
Summary of Fiscal 2026 Elements of Compensation
| Compensation Elements | Salary | Annual Incentive Program | Stock Options | Time-Based RSU Awards | Performance-Based RSU Awards | | | Fixed | Variable, At-Risk | | | | | Recipients | All NEOs | | | | | | When Granted | Reviewed annually | Annually | | | | | Form of Delivery | Cash | | Equity | | | | Type of Performance | Short-Term | | Long-Term | | | | Performance Period | Ongoing | 1-year | Vest ratably over 3 years | | Vests at the end of the 3-year performance period | | How Payout is Determined | C&L Committee Judgment | Quantitative based on achievement against targets; small portion qualitative | Based on stock price on exercise/vest date | | Quantitative based on achievement against targets and a rTSR modifier(1) | | Performance Metrics | N/A | Service revenue; operating income, net of certain items; and annualized new business revenue | N/A | N/A | Service revenue; operating income, net of certain items, and rTSR |
Summary of Fiscal 2026 Elements of Compensation
| (1) Performance-based RSU awards are subject to a relative TSR metric, which modifies the final payout downward or upward by up to 25% based on the Company’s three-year TSR performance versus the S&P 500’s three-year TSR performance. |
Highlights of Executive Compensation Practices
| WHAT WE DO | WHAT WE DON’T DO | | ✓ Pay for performance. A significant portion of executive pay is not guaranteed but rather tied to key financial metrics that are disclosed to our stockholders. ✓ Mitigate undue risk in compensation programs. The executive compensation program includes features that reduce the possibility of the NEOs, either individually or as a group, making excessively risky business decisions that could maximize short-term results at the expense of longer-term value. ✓ Balance of short-term and long-term incentives. Our incentive programs are designed to provide an appropriate balance of annual and longer-term incentives. ✓ Capped award payouts. Amounts or shares that can be earned under the annual incentive program, as well as the time-based stock awards and performance-based stock awards, are capped. ✓ Stock ownership guidelines. There are restrictions on sales of vested awards until a NEO has attained ownership of the Company’s stock as follows: CEO – six times base salary; and other NEOs – three times base salary. ✓ Include double-trigger change in control provisions. Our Change in Control Plan for officers is a “double-trigger” arrangement, requiring change in control and a subsequent termination of employment. ✓ Clawback policy. Clawback policy applicable to our annual incentive program and performance-based stock awards allows us to recover excess incentive-based compensation from our executive officers in the event of an accounting restatement. ✓ Include non-compete and other forfeiture provisions in our equity-based compensation agreements. These provisions allow the Company to cancel all or any outstanding portion of equity awards and recover the gross value of any vested time-based stock awards, vested performance-based stock awards, or profits from exercises of options in the event of a violation of the restrictive covenants. ✓ Utilize an independent compensation consulting firm. The C&L Committee benefits from its utilization of an independent compensation consulting firm, which provides no other services to the Company. | × No employment agreements. We do not have employment contracts for our NEOs. Employment of all of our executive officers is “at will.” × No significant perquisites. The benefits our NEOs receive in the form of health insurance, life insurance, and Company matching contributions to the 401(k) Plan are the same benefits generally available to all our employees. × No hedging, pledging or short sales transactions permitted. Our executive officers, including NEOs, and directors are prohibited from engaging in any hedging, pledging, or other similar types of transactions with respect to the Company’s common stock. × No dividends or dividend equivalents on unearned performance-based awards. Stock awards do not earn or pay dividends until the shares are earned. × No gross-ups. We do not provide our NEOs with any Section 280G excise tax gross-up payments. |
Annual Incentive Program
Annual Incentive Program The annual incentive program was established to motivate NEOs to meet the financial goals set by the Company as presented to its stockholders, while maintaining alignment with stockholders’ interests. Upon achievement of the minimum eligible performance, payouts under our annual incentive program are determined based upon the satisfaction of certain quantitative and qualitative components. Predetermined performance targets are established at the beginning of each fiscal year (by the C&L Committee with consultation of management) and are typically based on the Board-approved fiscal year financial plan. The performance targets are intended to provide a balance between growing revenue and managing expenses. For extraordinary circumstances, the C&L Committee reserves the right to apply discretion and make adjustments (no such adjustments outside of the pre-approved terms of the plan were made for fiscal 2026). The qualitative component consists of individual-specific goals established at the beginning of the fiscal year based on functions and responsibilities unique to the individual. The CEO can potentially receive up to 20% of base salary and all other NEOs can potentially receive up to 10% of base salary, in each case for achieving their personal goals. The assessment of qualitative goals is subjective, based on the discretion of the C&L Committee. For fiscal 2026, the C&L Committee evaluated each NEO and determined the specific percentage of the qualitative portion to award each NEO as presented on the following page. Each NEO has an opportunity to earn a percentage of their annualized base salary based on achievement of goals at threshold, target, and maximum. The various percentages of base salary that each NEO is eligible to earn for achievement of the performance measures in the aggregate are as follows:
Annual Incentive Program
| | Quantitative Component (% of base salary) | | | Qualitative Component (maximum % of base salary) | | | Threshold | Target | Maximum | | | John B. Gibson | 55.0% | 130.0% | 205.0% | 20.0% | | Other NEOs | 40.0% | 90.0% | 140.0% | 10.0% |
Annual Incentive Program
Thresholds are set as the floor with any achievement below threshold resulting in no payout for the respective performance metric. Maximums are set as a ceiling on the amount of payout a NEO can receive for each performance metric. The performance metrics for the fiscal 2026 annual incentive program for the NEOs were established as follows:
Annual Incentive Program
| | Fiscal 2026 Year-over-Year Growth Rates | | | % of Plan Dollars | | | Achievement as a % of Target | | Bonus Objectives(1) | Threshold | Target | Maximum | Threshold | Target | Maximum | | | Service revenue | 14.4% | 19.2% | 21.5% | 96.0% | 100.0% | 102.0% | 97.7% | | Operating income, net of certain items(2) | 17.1% | 21.9% | 24.4% | 96.0% | 100.0% | 102.0% | 96.7% | | Annualized new business revenue(3) | 23.4% | 31.3% | 35.2% | 94.0% | 100.0% | 103.0% | 95.7% |
Annual Incentive Program
| (1) The annual incentive program allows for certain adjustments to metrics as reported in our consolidated financial statements. The acquisition component of service revenue is included up to a maximum of 2% of service revenue at target. |
Annual Incentive Program
| (2) Operating income, net of certain items, is a non-GAAP measure. Refer to “Paychex, Inc. Non-GAAP Financial Measures” in Appendix A for a discussion of this non-GAAP measure and a reconciliation to the most comparable GAAP measure of operating income. |
Annual Incentive Program
| (3) Annualized new business revenue is the approximate amount of revenue to be earned over the first 12-month period, from the sale in the current fiscal year, of certain management solutions; and professional employer organization and insurance solutions to new clients and new product sales to existing clients. This measure is not directly calculated from our audited financial statements, as reported service revenue also includes recurring revenue from pre-existing clients. This metric is set to provide incentive for executives to strive to exceed the target, given the relationship to recurring revenue. |
Annual Incentive Program
Each metric is assigned a different weighting on an individual basis, depending on the position and role of the particular NEO. Each performance objective, along with the target percentage of base salary that can be earned for that metric, and the actual payout percentage is set forth below for our NEOs, in accordance with calculations per the program:
Annual Incentive Program
| | Mr. Gibson | | Other NEOs | | | Bonus Objectives | % of Base Salary at Target | % of Base Salary Achieved(1) | % of Base Salary at Target | % of Base Salary Achieved(1) | | Service revenue | 37.5% | 26.0% | 30.0% | 21.4% | | Operating income, net of certain items(2) | 55.0% | 26.1% | 35.0% | 18.4% | | Annualized new business revenue | 37.5% | 23.2% | 25.0% | 14.3% | | Total quantitative annual incentive | 130.0% | 75.3% | 90.0% | 54.1% | | Qualitative(3) | 20.0% | 20.0% | 10.0% | 10.0% | | Total | 150.0% | 95.3% | 100.0% | 64.1% |
Annual Incentive Program
| (1) If the actual achievement under a given performance metric is between two thresholds (e.g., between threshold and target or between target and maximum), then the percentage of base salary achieved would be calculated based on a straight-line interpolation of the achievement level above threshold or target, as appropriate, for such performance metric. |
Annual Incentive Program
| (2) Operating income, net of certain items, is a non-GAAP measure. Refer to “Paychex, Inc. Non-GAAP Financial Measures” in Appendix A of this proxy statement for a discussion of this non-GAAP measure and a reconciliation to the most comparable GAAP measure of operating income. |
Annual Incentive Program
| (3) The NEOs have an opportunity to earn a percentage of base salary based on individual-specific qualitative goals related to the functions and responsibilities unique to the individual. The C&L Committee may determine, at its sole discretion, whether satisfactory achievement has occurred, regardless of achievement against the pre-established individual goals. |
Annual Incentive Program
The actual achievement translated to the incentive payments for our NEOs is as follows:
Annual Incentive Program
| | Annualized Base Salary(1) | Minimum Potential Payout(2) | Target Potential Payout(2) | Maximum Potential Payout(2) | Actual Incentive Compensation Earned(3) | % of Target Achieved | | John B. Gibson | $925,000 | $— | $1,387,500 | $2,081,250 | $881,448 | 64% | | Robert L. Schrader | $525,000 | $— | $525,000 | $787,500 | $336,656 | 64% | | Adam Ante | $500,000 | $— | $500,000 | $750,000 | $320,625 | 64% | | Ryan Bergstrom | $475,000 | $— | $475,000 | $712,500 | $304,594 | 64% | | Chad Parodi | $475,000 | $— | $475,000 | $712,500 | $304,594 | 64% |
Annual Incentive Program
| (1) This represents the NEO’s annualized base salary as of May 31, 2026. It may differ from base salary paid for fiscal 2026 reflected in the Fiscal 2026 Summary Compensation Table of this proxy statement, due to timing of salary increases, start dates, etc. |
Annual Incentive Program
| (2) These columns represent the range of payout that each NEO has the opportunity to earn. The minimum potential payout indicates that no payout is earned if achievement is below threshold. The maximum potential payout is based on the percentage of base salary that each NEO can earn for maximum achievement. |
Annual Incentive Program
| (3) Actual incentive compensation earned is calculated as annualized base salary multiplied by the percentage of base salary achieved and is provided in the Fiscal 2026 Summary Compensation Table of this proxy statement. |
Equity-Based Compensation
Equity-Based Compensation To align our NEOs’ interests with the long-term interests of our stockholders, we grant equity awards under the 2002 Plan. Annually, the C&L Committee reviews the NEO compensation of our Peer Group to determine the desired pay range for our officers. See the “Compensation Decision Process” section later in this CD&A for further information on the Committee’s process for determining total compensation, including equity awards. This review, along with each officer’s individual performance and potential, determines the total compensation. The quantity of equity awards is based on an estimated total value as determined by the C&L Committee in conjunction with its total compensation review and evaluation. In July 2025, the C&L Committee made an annual equity grant to our NEOs that was a blend of performance-based RSUs, stock options, and time-based RSUs. The award value was split as follows:
Annual Equity Award Value Allocation
Annual Equity Award Value Allocation This annual distribution provides for a significant portion of the total equity-based compensation value to be performance-based, consistent with the C&L Committee’s total compensation determination. For our July 2025 annual grants, the C&L Committee determined the estimated total target value to be approximately: $8,500,000 for Mr. Gibson; $2,500,000 for Mr. Schrader; $2,000,000 for Messrs. Ante and Bergstrom; and $1,600,000 for Mr. Parodi. The estimated total target value of Messrs. Gibson’s and Schrader’s equity-based compensation was increased in fiscal 2026 to adjust their compensation closer to market based on an analysis against our Peer Group. See further discussion under the “Peer Group” section within this CD&A. The following table summarizes the approximate total annual equity award value allocation awarded to each NEO, and the number of performance-based RSUs, stock options and RSUs granted in July 2025:
Annual Equity Award Value Allocation
| | Performance-Based RSU Awards (at Target)(1) | | Stock Option Awards(2) | | Time-Based RSU Awards(3) | | | NEO | ($) | (#) | ($) | (#) | ($) | (#) | | John B. Gibson | $5,100,000 | 36,252 | $2,125,000 | 62,758 | $1,275,000 | 9,063 | | Robert L. Schrader | $1,500,000 | 10,662 | $625,000 | 18,458 | $375,000 | 2,666 | | Adam Ante | $1,200,000 | 8,530 | $500,000 | 14,767 | $300,000 | 2,132 | | Ryan Bergstrom | $1,200,000 | 8,530 | $500,000 | 14,767 | $300,000 | 2,132 | | Chad Parodi | $960,000 | 6,824 | $400,000 | 11,813 | $240,000 | 1,706 |
Annual Equity Award Value Allocation
| (1) Performance-based RSU awards are subject to a three-year performance period. |
Annual Equity Award Value Allocation
| (2) Stock option awards vest one-third per year over three years and have a term of 10 years. |
Annual Equity Award Value Allocation
| (3) Time-based RSU awards vest one-third per year over three years. |
2026-2028 Performance Stock Awards
2026-2028 Performance Stock Awards Our performance stock awards are designed to provide variable compensation that is focused on longer-term results. The performance-based RSUs granted in fiscal 2026 have a three-year performance period, and may be earned based on the sustained year-over-year growth in service revenue and operating income (equally weighted), net of certain items compared to performance targets, subject to a downward or upward adjustment of 25% based on relative TSR. Payout may range from 0% to 200% of target. The C&L Committee establishes performance targets intended to be appropriately challenging at all levels, including the threshold level, but attainable with increasing difficulty for each level beyond threshold. The threshold level was expected to be appropriately challenging but achievable under normal circumstances. The target level would be achieved if the Company performed as expected under our strategic plan for the three-year period. The maximum level would be achievable only with exceptional performance. Operating income, net of certain items, is a non-GAAP measure. Refer to “Paychex, Inc. Non-GAAP Financial Measures” in Appendix A of this proxy statement for a discussion of this non-GAAP measure and a reconciliation to the most comparable GAAP measure of operating income. The goals are set by the C&L Committee upfront for the entire performance period. The threshold, target, and maximum growth rates for service revenue and operating income, net of certain items for each of the three years in the performance period are determined as percentage increases over the actual results from the prior year. As a result, payouts for the second and third year of the performance period require sustained growth over the three-year period. Because growth rates are calculated separately for each year in the performance period and are not aggregated over the three-year performance period, the plan allows for a long-term growth goal while recalibrating to actual performance on an annual basis. The relative TSR metric modifies the final payout downward or upward by up to 25% based on the Company’s three-year TSR performance versus the S&P 500. The S&P 500 consists of a broad group of companies that represent investors’ alternative capital investment opportunities, thereby aligning the performance-based RSU payout opportunity to the long-term investment experience of our stockholders. If relative TSR performance is at or below the 25th percentile, the final payout is reduced by 25%. If the relative TSR performance is at or above the 75th percentile, the payout is increased by 25%. Payouts are linearly interpolated for relative TSR performance between the 25th and 75th percentiles, with no adjustment applied at the 50th percentile. The relative TSR modifier may not result in a payout in excess of 200% of the target shares.
Equity Grant Practices
Equity Grant Practices Key features of our equity grant practices include:
Equity Grant Practices
| • | equity awards are granted in accordance with a predetermined schedule, which coincides with regularly scheduled C&L Committee meetings that are scheduled more than one year in advance; |
Equity Grant Practices
| • | annual grants of equity awards to our NEOs and directors are approved by the C&L Committee in July after the release of our fiscal year-end earnings and upcoming fiscal year financial guidance; |
Equity Grant Practices
| • | equity awards granted on dates other than the annual grant date, which may be made in connection with a hire, promotion, or Board appointment, are not granted during any trading black-out periods; and |
Equity Grant Practices
| • | the C&L Committee does not grant equity awards in anticipation of the release of material nonpublic information, and we do not time the release of material nonpublic information based on equity award grant dates. |
Equity Grant Practices
Refer to the “Policies and Practices Related to the Grant of Certain Equity Awards” discussion within the Named Executive Compensation section of this proxy statement for further information.
Non-Compete and Other Forfeiture Provisions
Should any of these activities occur, we may cancel all or any outstanding portion of the equity awards subject to this provision and recover the gross value of any vested time-based stock awards and vested performance-based stock awards, including all dividends and dividend equivalents. In the case of stock options, we may suspend the NEO’s right to exercise the option and/or may declare the option forfeited. In addition, we may seek to recover all profits from certain prior exercises as liquidated damages and pursue other available legal remedies.
Change in Control Plan
Change in Control Plan Executives of the Company are covered by a Change in Control Plan. Upon involuntary termination by the Company without cause or a voluntary termination by the participant for good reason, within 12 months following a change in control, the executive becomes entitled to certain severance benefits. Such severance benefits are conditioned upon the execution of a general release in favor of the Company. We do not provide any “single trigger” payments or benefits, nor do we provide any 280G excise tax gross-up payments. Refer to the “Potential Payments upon Termination or Change in Control” discussion within the Named Executive Officer Compensation section of this proxy statement for further information.
Role of the Compensation Consultant
Role of the Compensation Consultant As outlined in its charter, the C&L Committee has the authority to retain consultants and advisers, at the Company’s expense, to assist in the discharge of the committee’s duties. The C&L Committee can retain and dismiss such consultants and advisers at any time. The consultants report directly to the committee and have direct access to the committee through the C&L Committee’s Chair. The C&L Committee requires that any consultant it retains cannot be utilized by management for other purposes. Although management, particularly the VP, Chief Human Resources Officer (“CHRO”), may work closely with the consultant, the consultant is ultimately accountable to the C&L Committee on matters related to executive compensation. The C&L Committee retains the services of Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent compensation consultant. FW Cook has not provided any other services to the Company prior to or subsequent to being retained as the compensation consultant to the C&L Committee. The C&L Committee was solely responsible for the decision to retain FW Cook as its consultant. FW Cook advises the C&L Committee on matters of NEO compensation, assists with analysis and research, and provides updates on evolving best practices in compensation. While FW Cook may express an opinion on compensation matters, the C&L Committee is solely responsible for setting the type and amount of compensation for NEOs. The C&L Committee recognizes that it is essential to receive objective advice from its compensation consultant. The C&L Committee closely examines the procedures and safeguards that FW Cook takes to ensure that the compensation consulting services are objective. The C&L Committee has assessed the independence of FW Cook pursuant to SEC rules and concluded that FW Cook’s work for the C&L Committee does not raise any conflict of interest.
Role of Compensation & Leadership Committee and Management
| • | reviews the companies in our Peer Group for any changes; |
Role of Compensation & Leadership Committee and Management
| • | establishes and approves the performance targets and payouts under incentive-based programs and awards; and |
Role of Compensation & Leadership Committee and Management
| • | grants equity awards under our 2002 Plan. |
Role of Compensation & Leadership Committee and Management
| • | compensation consultant reports and analyses; |
Role of Compensation & Leadership Committee and Management
| • | comparative market data as it pertains to executive officers at Peer Group companies for all relevant compensation elements; and |
Role of Compensation & Leadership Committee and Management
The C&L Committee strives for our NEOs’ compensation to be in line with our Peer Group. The information provided by the compensation consultant indicates whether our compensation package, if target performance is achieved, is comparable to the median compensation of our Peer Group, given current competitive practices, overall best practices, and other compensation and benefit trends. Management reports are used to evaluate compensation recommendations and the impact to total compensation for each individual. They are also used to view a complete picture of the trend of compensation to executive officers, both as a team and as individuals. This facilitates discussion that more accurately details individual officer compensation, noting differences that reflect officer tenure, performance, and position in the management structure. The C&L Committee uses these management updates along with peer information, where available, as tools to evaluate executive compensation. This information is reviewed in a subjective manner. There is no implied direct or formulaic linkage between peer information and the C&L Committee’s compensation decisions. Our CEO and our CHRO provide recommendations to the C&L Committee on design elements for compensation. These individuals, and from time-to-time invited guests including other officers, will attend the meetings of the C&L Committee to present and respond to questions on current or proposed plan design. Annually, our CEO reviews achievement of the recently completed fiscal year’s plan and presents recommendations regarding salary for each of the NEOs (other than himself), the upcoming fiscal year’s annual incentive program structure, and equity awards. Management is excluded from executive sessions of the C&L Committee where final decisions on compensation are made, particularly those on our CEO’s performance and compensation. Executive sessions occur at each meeting of the C&L Committee.
Peer Group
Peer Group In addition to many other factors that affect compensation decisions, the C&L Committee takes into account the compensation practices of our Peer Group, where available, in formulating our compensation program. Peer Group review is not the sole determining factor in the C&L Committee’s decisions on compensation, and the C&L Committee reserves the discretion to adjust compensation based on other factors as previously discussed. The Peer Group companies were selected based upon the following criteria: comparable business model, company size including revenues, earnings, and market capitalization, executive talent sources, competition for investor capital, companies considered by our investors to be our peers, and overall reasonableness. The Peer Group is comprised of the following industries or segments: a direct competitor in the HCM industry, financial transaction management companies, and business services and outsourcing companies. Our Peer Group used for evaluating executive compensation for fiscal 2026 consisted of the following companies:
Peer Group
| Peer Group | | | Automatic Data Processing, Inc. | Global Payments Inc. | | Broadridge Financial Solutions, Inc. | Intuit, Inc. | | Corpay, Inc. | Jack Henry & Associates, Inc. | | Equifax, Inc. | Moody’s Corporation | | Euronet Worldwide, Inc. | SS&C Technologies Holdings, Inc. | | Fair Isaac Corporation | TransUnion | | Fiserv, Inc. | Verisk Analytics, Inc. | | Gartner, Inc. | WEX, Inc. |
Paychex, Inc. vs. Peer Group
Paychex, Inc. vs. Peer Group
Paychex, Inc. vs. Peer Group
| (1) Based on the completed fiscal year 2025 results of Paychex and each Peer-Group company. |
Paychex, Inc. vs. Peer Group
The C&L Committee annually reviews and approves the selection of Peer Group companies, adjusting the group from year to year based upon our business and changes in the Peer Group companies’ business or the comparability of their metrics. The Peer Group may also be adjusted in the event of mergers, acquisitions, or other significant economic changes. The Peer Group used to determine fiscal 2026 compensation was not adjusted from the prior year.
Fiscal 2026 Summary Compensation Table
Fiscal 2026 Summary Compensation Table The table below presents the total compensation for each of the NEOs.
Fiscal 2026 Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary(1) | Bonus(2) | Stock Awards(3) | Option Awards(4) | Non-Equity Incentive Plan Compensation(5) | All Other Compensation(6) | Total | | John B. Gibson President and CEO | 2026 | $921,923 | $— | $6,328,512 | $2,124,986 | $881,448 | $17,674 | $10,274,543 | | | 2025 | $900,000 | $— | $5,183,393 | $1,749,999 | $957,375 | $16,644 | $8,807,411 | | | 2024 | $922,211 | $— | $4,024,955 | $1,725,007 | $844,875 | $17,807 | $7,534,855 | | Robert L. Schrader SVP and CFO | 2026 | $521,923 | $— | $1,861,336 | $624,988 | $336,656 | $14,423 | $3,359,326 | | | 2025 | $493,654 | $— | $1,480,900 | $500,007 | $357,500 | $14,646 | $2,846,707 | | | 2024 | $414,904 | $— | $839,933 | $359,984 | $250,289 | $15,123 | 1,880,233 | | Adam Ante SVP of HCM | 2026 | $509,615 | $— | $1,489,012 | $500,011 | $320,625 | $8,502 | $2,827,765 | | | 2025 | $56,827 | $— | $3,196,882 | $— | $— | $— | $3,253,709 | | Ryan Bergstrom Chief Product and Technology Officer | 2026 | $484,135 | $— | $1,489,012 | $500,011 | $304,594 | $8,038 | $2,785,790 | | Chad Parodi SVP of HR & Benefits Services | 2026 | $475,000 | $50,000 | $1,191,266 | $399,988 | $304,594 | $34,516 | $2,455,364 |
Fiscal 2026 Summary Compensation Table
| (1) The amounts reported in this column reflect the base salary paid to the NEOs during the fiscal year. For fiscal 2024, there were 27 bi-weekly pay periods paid compared to 26 bi-weekly periods in fiscal 2026 and fiscal 2025. |
Fiscal 2026 Summary Compensation Table
| (2) The amount reported in this column for fiscal 2026 represents the final installment of a multi-year signing bonus Mr. Parodi received upon the commencement of his employment during fiscal 2024 pursuant to his employment offer letter. Payment of the installment was contingent upon Mr. Parodi’s continued employment. |
Fiscal 2026 Summary Compensation Table
| (3) The amounts in this column reflect the aggregate grant-date fair value of time-based stock awards and performance-based stock awards granted during the respective fiscal years and were computed in accordance with FASB ASC Topic 718. The amounts do not reflect whether the recipient has actually realized a financial gain from such awards (such as a lapse in the restrictions on a stock award). The grant-date fair values per share of the fiscal 2026 and fiscal 2025 performance-based stock awards that included performance conditions and a market condition were calculated using a Monte Carlo simulation. The grant-date fair values per share of the fiscal 2025 and fiscal 2024 performance-based stock awards, that only included performance conditions, and all time-based stock awards, were determined based on the closing price of the underlying common stock on the date of grant, adjusted for the present value of expected dividends over the applicable performance period for performance-based stock awards. For additional information about the assumptions used in these calculations for fiscal 2026, see Note F, “Stock-Based Compensation Plans,” to our audited consolidated financial statements for fiscal 2026, included in our Form 10-K. |
Fiscal 2026 Summary Compensation Table
| Performance-based stock awards are reflected in the Fiscal 2026 Summary Compensation Table assuming target achievement at the date of grant. The grant-date fair value of these awards at target achievement and at maximum achievement is as follows: |
Fiscal 2026 Summary Compensation Table
| | Fiscal 2026 | | Fiscal 2025 | | Fiscal 2024 | | | | Target | Maximum | Target | Maximum | Target | Maximum | | John B. Gibson | $5,053,529 | $10,107,058 | $4,133,361 | $8,266,721 | $2,874,972 | $4,312,459 | | Robert L. Schrader | $1,486,283 | $2,972,566 | $1,180,960 | $2,361,920 | $599,924 | $899,886 | | Adam Ante(a) | $1,189,082 | $2,378,164 | $3,196,882 | $4,795,324 | | | | Ryan Bergstrom(a) | $1,189,082 | $2,378,164 | | | | | | Chad Parodi(a) | $951,266 | $1,902,531 | | | | |
Fiscal 2026 Summary Compensation Table
| (a) Mr. Ante was not an NEO for fiscal 2024 and Messrs. Bergstrom and Parodi were not NEOs for fiscal 2025 and fiscal 2024. |
Fiscal 2026 Summary Compensation Table
| The fiscal 2026 and fiscal 2025 annual performance-based stock awards have a three-year performance period. The fiscal 2024 annual performance-based stock awards had a two-year performance period, followed by an additional year of service required (i.e., total of three years). |
Fiscal 2026 Summary Compensation Table
| (4) The amounts in this column reflect the grant-date fair value of stock options granted during the respective fiscal years and were computed in accordance with FASB ASC Topic 718. The amounts do not reflect whether the recipient has actually realized a financial gain from such awards (such as by exercising stock options). The grant-date fair values per share of the stock options were determined using a Black-Scholes option pricing model. For additional information about the assumptions used in these calculations for fiscal 2026, see Note F, “Stock-Based Compensation Plans,” to our audited consolidated financial statements for fiscal 2026, included in our Form 10-K. |
Fiscal 2026 Summary Compensation Table
| (5) The amounts in this column are the amounts earned under the annual incentive program. These amounts were paid in July following the applicable fiscal year end. Refer to the discussion in the CD&A “Elements of Compensation” subsection “Annual Incentive Program” for information on performance targets and achievement against those targets to determine the amount earned under this program for fiscal 2026. |
Fiscal 2026 Summary Compensation Table
| (6) The amounts reported in this column reflect the Company matching contributions under the 401(k) Plan. The amount reported in this column for fiscal 2026 for Mr. Parodi reflects a housing allowance and the Company’s matching contributions under the 401(k) Plan. |
Grants of Plan-Based Awards for Fiscal 2026
Grants of Plan-Based Awards for Fiscal 2026 The table below presents estimated possible payouts under the Company’s annual incentive program for fiscal 2026 based on achievement of performance objectives at various levels for the Company and individual NEOs. It also summarizes equity awards granted during fiscal 2026 to each of the NEOs. This information does not set forth the actual payout awarded to the NEOs for fiscal 2026.
Grants of Plan-Based Awards for Fiscal 2026
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | All Other Option Awards: Number of Securities Underlying Options(4) (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant- Date Fair Value of Stock and Option Awards(5) ($) | | Name and Grant Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | John B. Gibson | | | | | | | | | | | | | Annual Incentive Program | 7/15/2025 | $693,750 | $1,387,500 | $2,081,250 | | | | | | | | | Time-Based RSUs | 7/15/2025 | | | | | | | 9,063 | | | $1,274,983 | | Performance-Based RSUs | 7/15/2025 | | | | 18,126 | 36,252 | 72,504 | | | | $5,053,529 | | Stock Options | 7/15/2025 | | | | | | | | 62,758 | $140.68 | $2,124,986 | | Robert L. Schrader | | | | | | | | | | | | | Annual Incentive Program | 7/15/2025 | $262,500 | $525,000 | $787,500 | | | | | | | | | Time-Based RSUs | 7/15/2025 | | | | | | | 2,666 | | | $375,053 | | Performance-Based RSUs | 7/15/2025 | | | | 5,331 | 10,662 | 21,324 | | | | $1,486,283 | | Stock Options | 7/15/2025 | | | | | | | | 18,458 | $140.68 | $624,988 |
Grants of Plan-Based Awards for Fiscal 2026
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | All Other Option Awards: Number of Securities Underlying Options(4) (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant- Date Fair Value of Stock and Option Awards(5) ($) | | Name and Grant Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Adam Ante | | | | | | | | | | | | | Annual Incentive Program | 7/15/2025 | $250,000 | $500,000 | $750,000 | | | | | | | | | Time-Based RSUs | 7/15/2025 | | | | | | | 2,132 | | | $299,930 | | Performance-Based RSUs | 7/15/2025 | | | | 4,265 | 8,530 | 17,060 | | | | $1,189,082 | | Stock Options | 7/15/2025 | | | | | | | | 14,767 | $140.68 | $500,011 | | Ryan Bergstrom | | | | | | | | | | | | | Annual Incentive Program | 7/15/2025 | $237,500 | $475,000 | $712,500 | | | | | | | | | Time-Based RSUs | 7/15/2025 | | | | | | | 2,132 | | | $299,930 | | Performance-Based RSUs | 7/15/2025 | | | | 4,265 | 8,530 | 17,060 | | | | $1,189,082 | | Stock Options | 7/15/2025 | | | | | | | | 14,767 | $140.68 | $500,011 | | Chad Parodi | | | | | | | | | | | | | Annual Incentive Program | 7/15/2025 | $237,500 | $475,000 | $712,500 | | | | | | | | | Time-Based RSUs | 7/15/2025 | | | | | | | 1,706 | | | $240,000 | | Performance-Based RSUs | 7/15/2025 | | | | 3,412 | 6,824 | 13,648 | | | | $951,266 | | Stock Options | 7/15/2025 | | | | | | | | 11,813 | $140.68 | $399,988 |
Grants of Plan-Based Awards for Fiscal 2026
| (1) The amounts in these columns consist of possible payouts under our annual incentive program for fiscal 2026. The actual amounts earned by each NEO for fiscal 2026 are reported as Non-Equity Incentive Plan Compensation in the Fiscal 2026 Summary Compensation Table. Additional information regarding how the payout amounts under our annual incentive program are determined can be found under the subheading entitled “Annual Incentive Program” in the Compensation Discussion and Analysis Section of this proxy statement. |
Grants of Plan-Based Awards for Fiscal 2026
| (2) The amounts in these columns consist of performance-based RSUs granted during fiscal 2026 under the 2002 Plan. For performance-based RSUs, the NEOs do not have voting rights and do not accrue dividend equivalents. |
Grants of Plan-Based Awards for Fiscal 2026
| For performance-based RSUs granted on July 15, 2025, the threshold, target, and maximum number of performance-based RSUs that may be earned are based on achievement compared to established targets for service revenue (weighted 50%) and operating income, net of certain items (weighted 50%) over a three-year performance period. Operating income, net of certain items, is a non-GAAP measure. Refer to “Paychex, Inc. Non-GAAP Financial Measures” in Appendix A of this proxy statement for a discussion of this non-GAAP measure and a reconciliation to the most comparable GAAP measure of operating income. In addition, actual payout is subject to a downward or upward adjustment of 25% based on based on the Company’s three-year TSR performance versus that of the S&P 500. |
Grants of Plan-Based Awards for Fiscal 2026
| (3) The amounts in this column consist of time-based RSUs granted in fiscal 2026 under the 2002 Plan. The time-based RSUs granted to our executive officers vest one-third annually over a three-year period from the date of grant, provided the executive officer is an employee of the Company on the vesting date. NEOs do not have voting rights on these awards prior to vesting, but do accrue dividend equivalents which are paid at the time of vesting. |
Grants of Plan-Based Awards for Fiscal 2026
| (4) The amounts in this column consist of time-based stock options granted in fiscal 2026 under the 2002 Plan. The stock options have an exercise price equal to the closing stock price on the date of grant and have a term of ten years. The stock options granted to our executive officers, vest one-third per annum over a three-year period from the date of grant, provided the executive officer is an employee of the Company on the vesting date. |
Grants of Plan-Based Awards for Fiscal 2026
| (5) The amounts in this column represent the aggregate grant-date fair value of time-based RSUs, performance-based RSUs, and stock options granted in fiscal 2026 under the 2002 Plan. |
Grants of Plan-Based Awards for Fiscal 2026
| • | The grant-date fair value of the time-based RSUs granted to our NEOs in July 2025 was $140.68 per share and was determined based on the closing price of the underlying common stock on the date of grant. |
Grants of Plan-Based Awards for Fiscal 2026
| • | The grant-date fair value of the performance-based RSUs granted to our NEOs in July 2025 was $139.40 per share and was determined using a Monte Carlo simulation, applying the following assumptions; risk-free interest rate of 3.9%; a dividend yield of 3.1%; a stock-price volatility factor of 0.23; and a measurement period of 2.9 years from the date of grant. |
Grants of Plan-Based Awards for Fiscal 2026
| • | The grant-date fair value of the stock options granted to our NEOs in July 2025 was $33.86 and was determined using a Black-Scholes option pricing model, applying the following assumptions; risk-free interest rate of 4.4%; a dividend yield of 3.0%; a stock-price volatility factor of 0.26; and an expected option life of 6.5 years from the date of grant. |
Outstanding Equity Awards as of May 31, 2026
Outstanding Equity Awards as of May 31, 2026 The following table presents the equity awards made to NEOs which were outstanding as of May 31, 2026.
Outstanding Equity Awards as of May 31, 2026
| | Option Awards | | | | | Stock Awards | | | | | | Name | Option Grant Date | Number of Securities Underlying Unexercised Options (Exercisable) (#) | Number of Securities Underlying Unexercised Options (Unexercisable)(1) (#) | Option Exercise Price ($) | Option Expiration Date | Stock Award Grant Date | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested(3) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | | John B. Gibson | 7/15/2025 | — | 62,758 | $140.68 | 7/14/2035 | | | | | | | | 7/15/2024 | 21,375 | 42,751 | $121.63 | 7/14/2034 | | | | | | | | 7/15/2023 | 42,388 | 21,195 | $120.86 | 7/14/2033 | | | | | | | | 10/15/2022 | 20,485 | — | $109.19 | 10/14/2032 | | | | | | | | 7/15/2022 | 21,954 | — | $115.00 | 7/14/2032 | | | | | | | | 1/15/2022 | 2,972 | — | $125.00 | 1/15/2032 | | | | | | | | 7/15/2021 | 26,547 | — | $112.67 | 7/14/2031 | | | | | | | | 7/15/2020 | 39,823 | — | $73.53 | 7/15/2030 | | | | | | | | 7/10/2019 | 34,165 | — | $85.46 | 7/10/2029 | | | | | | | | 7/11/2018 | 31,653 | — | $69.54 | 7/10/2028 | | | | | | | | | | | | | 7/15/2025 | 9,063 | $878,930 | | | | | | | | | | 7/15/2024 | 5,756 | $558,217 | | | | | | | | | | 7/15/2023 | 3,172 | $307,621 | | | | | | | | | | 7/15/2023 | 21,175 | $2,053,552 | | | | | | | | | | 7/15/2025 | | | 36,252 | $3,515,719 | | | | | | | | 7/15/2024 | | | 34,531 | $3,348,816 | | Robert L. Schrader | 7/15/2025 | — | 18,458 | $140.68 | 7/14/2035 | | | | | | | | 7/15/2024 | 6,107 | 12,215 | $121.63 | 7/14/2034 | | | | | | | | 10/15/2023 | 2,824 | 1,413 | $117.98 | 10/14/2033 | | | | | | | | 7/15/2023 | 5,897 | 2,949 | $120.86 | 7/14/2033 | | | | | | | | 7/15/2022 | 7,684 | — | $115.00 | 7/14/2032 | | | | | | | | 7/15/2021 | 9,102 | — | $112.67 | 7/14/2031 | | | | | | | | 7/15/2020 | 16,519 | — | $73.53 | 7/15/2030 | | | | | | | | | | | | | 7/15/2025 | 2,666 | $258,549 | | | | | | | | | | 7/15/2024 | 1,644 | $159,435 | | | | | | | | | | 10/15/2023 | 226 | $21,917 | | | | | | | | | | 7/15/2023 | 442 | $42,865 | | | | | | | | | | 10/15/2023 | 1,498 | $145,276 | | | | | | | | | | 7/15/2023 | 2,946 | $285,703 | | | | | | | | | | 7/15/2025 | | | 10,662 | $1,034,001 | | | | | | | | 7/15/2024 | | | 9,866 | $956,805 | | Adam Ante | 7/15/2025 | — | 14,767 | $140.68 | 7/14/2035 | | | | | | | | | | | | | 7/15/2025 | 2,132 | $206,761 | | | | | | | | | | 4/15/2025 | 21,064 | $2,042,787 | | | | | | | | | | 4/15/2025 | 10,380 | $1,006,652 | | | | | | | | | | 7/15/2025 | | | 8,530 | $827,239 | | | | | | | | 5/14/2025 | | | 34,536 | $3,349,301 |
Outstanding Equity Awards as of May 31, 2026
| | Option Awards | | | | | Stock Awards | | | | | | Name | Option Grant Date | Number of Securities Underlying Unexercised Options (Exercisable) (#) | Number of Securities Underlying Unexercised Options (Unexercisable)(1) (#) | Option Exercise Price ($) | Option Expiration Date | Stock Award Grant Date | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested(3) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | | Ryan Bergstrom | 7/15/2025 | — | 14,767 | $140.68 | 7/14/2035 | | | | | | | | | | | | | 7/15/2025 | 2,132 | $206,761 | | | | | | | | | | 4/15/2025 | 15,799 | $1,532,187 | | | | | | | | | | 4/15/2025 | 8,751 | $848,672 | | | | | | | | | | 7/15/2025 | | | 8,530 | $827,239 | | | | | | | | 5/14/2025 | | | 24,669 | $2,392,400 | | Chad Parodi | 7/15/2025 | — | 11,813 | $140.68 | 7/14/2035 | | | | | | | | 7/15/2024 | 4,397 | 8,795 | $121.63 | 7/14/2034 | | | | | | | | 1/15/2024 | 4,516 | 2,259 | $119.72 | 1/14/2034 | | | | | | | | | | | | | 7/15/2025 | 1,706 | $165,448 | | | | | | | | | | 7/15/2024 | 1,316 | $127,626 | | | | | | | | | | 1/15/2024 | 1,170 | $113,467 | | | | | | | | | | 7/15/2025 | | | 6,824 | $661,792 | | | | | | | | 7/15/2024 | | | 4,933 | $478,402 |
Outstanding Equity Awards as of May 31, 2026
| (1) The options displayed in this column vest one-third per annum over a three-year period from the date of grant. |
Outstanding Equity Awards as of May 31, 2026
| The following table provides information with respect to the future vesting of each NEO’s outstanding options. |
Outstanding Equity Awards as of May 31, 2026
| | Number of Securities Vesting (#) | | | | | Fiscal 2027 | Fiscal 2028 | Fiscal 2029 | | John B. Gibson | 63,489 | 42,295 | 20,920 | | Robert L. Schrader | 16,621 | 12,261 | 6,153 | | Adam Ante | 4,922 | 4,922 | 4,923 | | Ryan Bergstrom | 4,922 | 4,922 | 4,923 | | Chad Parodi | 10,593 | 8,336 | 3,938 |
Outstanding Equity Awards as of May 31, 2026
| (2) The stock awards in this column include all time-based stock awards. Time-based stock awards granted to our NEOs vest one-third per annum over a three-year period from the date of grant. Additionally, for Messrs. Gibson and Schrader, this column includes performance-based stock awards granted during fiscal 2024 for which the performance conditions have been met. These performance-based stock awards remain subject to a one-year service requirement, lapsing on the third anniversary of the grant date. |
Outstanding Equity Awards as of May 31, 2026
| The stock awards in this column for Messrs. Ante and Bergstrom include time-based Paychex restricted stock awards (“RSAs”) and RSUs that were issued on April 14, 2025 in exchange for unvested stock awards originally granted by Paycor. The stock awards remain subject to the original vesting conditions: one third vests on the first anniversary of the grant date, and the remainder vests in eight equal quarterly installments thereafter. |
Outstanding Equity Awards as of May 31, 2026
| The following table provides information with respect to the future vesting of each NEO’s outstanding stock awards: |
Outstanding Equity Awards as of May 31, 2026
| | Number of Securities Vesting (#) | | | | | Fiscal 2027 | Fiscal 2028 | Fiscal 2029 | | John B. Gibson | 30,246 | 5,899 | 3,021 | | Robert L. Schrader | 6,822 | 1,711 | 889 | | Adam Ante | 22,788 | 10,077 | 711 | | Ryan Bergstrom | 18,230 | 7,741 | 711 | | Chad Parodi | 2,396 | 1,227 | 569 |
Outstanding Equity Awards as of May 31, 2026
| The market value displayed is based on the number of shares or units that have not vested multiplied by $96.98, the closing price of the Company’s common stock as of May 29, 2026. Total dividends or dividend equivalents on the stock awards that have not vested as of May 31, 2026, were as follows: Mr. Gibson – $220,974; Mr. Schrader – $53,271; Mr. Ante – $182,702; Mr. Bergstrom – $144,715; and Mr. Parodi – $30,752. The grant-date fair value for stock awards incorporates expected dividends or dividend equivalents. |
Outstanding Equity Awards as of May 31, 2026
| (3) The stock awards in these columns represent performance-based RSUs granted in July 2025, May 2025 (for Messrs. Ante and Bergstrom) and July 2024. In accordance with SEC rules, the number of performance units reflected in the table is based on an assumed performance achievement. The assumed achievement shown in the table for the performance-based RSUs granted in July 2025 and July 2024 is at Target, assuming no TSR modifier is applied. For performance-based RSUs granted in July 2025 and July 2024, RSUs earned will be determined at the end of the three-year performance period ending May 31, 2028 and May 31, 2027, respectively, and will then vest on the third anniversary of the date of grant. The assumed achievement shown in the table for the performance-based RSUs granted in May 2025 is at Maximum. For the performance-based RSUs granted in May 2025, RSUs earned will be determined at the end of the three-year performance period ending May 31, 2028 and will then vest on July 15, 2028. The market value displayed is based on the assumed achievement multiplied by $96.98, the closing price of the Company’s common stock as of May 29, 2026. |
Option Exercises and Stock Vested in Fiscal 2026
Option Exercises and Stock Vested in Fiscal 2026 The following table provides information about the value realized by the NEOs upon the exercise of stock options and the lapsing of the restrictions on stock awards during fiscal 2026.
Option Exercises and Stock Vested in Fiscal 2026
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise(1) ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(2) ($) | | John B. Gibson | — | $— | 33,703 | $4,725,270 | | Robert L. Schrader | — | $— | 5,335 | $747,554 | | Adam Ante | — | $— | 35,810 | $4,209,585 | | Ryan Bergstrom | — | $— | 27,283 | $3,205,851 | | Chad Parodi | — | $— | 1,826 | $221,613 |
Option Exercises and Stock Vested in Fiscal 2026
| (1) The amounts in this column represent the difference between the market price of a share of the Company’s common stock as of the date of exercise and the exercise price of the option for all options exercised. |
Option Exercises and Stock Vested in Fiscal 2026
| (2) The amounts in this column are based on the closing stock price of the Company’s common stock on the vesting date. |
Non-Qualified Deferred Compensation Fiscal 2026
Non-Qualified Deferred Compensation Fiscal 2026 We offer a non-qualified and unfunded deferred compensation plan to our NEOs. Eligible employees can defer up to 50% of their base salary and annual incentive program award. The Company does not contribute to this plan. Gains and losses are credited based on the participant’s selection of a variety of designated investment choices. The NEO has sole control as to which of the designated funds to invest in and earns the resulting return on such investment. We do not match any participant deferral or guarantee a certain rate of return. Distributions are paid at one of the following dates selected by the participant: the participant’s termination date; the date the participant retires from any active employment; or a designated specific date. Payments can be made either in a lump sum or in annual installments over a period not to exceed ten years. The following table summarizes the activity under the plan:
Non-Qualified Deferred Compensation Fiscal 2026
| | Fiscal 2026 | | | | | Name | Executive Contributions(1) ($) | Aggregate Earnings/ (Losses), Net(2) ($) | Aggregate Withdrawals/ Distributions(3) ($) | Aggregate Balance as of May 31, 2026(4) ($) | | John B. Gibson | $— | $765,695 | $(1,014) | $5,282,298 |
Non-Qualified Deferred Compensation Fiscal 2026
Messrs. Schrader, Ante, Bergstrom, and Parodi are currently not participating in this plan.
Non-Qualified Deferred Compensation Fiscal 2026
| (1) The amounts in this column reflect the aggregate of the salary and bonus amounts deferred by the NEO during fiscal 2026. These are included in amounts reported in the Fiscal 2026 Summary Compensation Table. |
Non-Qualified Deferred Compensation Fiscal 2026
| (2) The amounts in this column reflect net realized gains/(losses) and net unrealized gains/(losses). They are not included in the Fiscal 2026 Summary Compensation Table as the earnings on these investments are not considered to be “above-market” earnings. |
Non-Qualified Deferred Compensation Fiscal 2026
| (3) The amounts in this column represent amounts withdrawn from the plan and have been included in the “Salary” and “Non-Equity Incentive Plan Compensation” amounts reported in the Summary Compensation Tables for previous years. |
Non-Qualified Deferred Compensation Fiscal 2026
| (4) The amounts in this column reflect the accumulated balances in the plan and include the “Salary” and “Non-Equity Incentive Plan Compensation” deferred amounts reported in current and previous years in the Fiscal 2026 Summary Compensation Table. |
Potential Payments Upon Termination or Change in Control Fiscal 2026
Potential Payments Upon Termination or Change in Control Fiscal 2026
Potential Benefits Upon Separation from Company
| | | Potential Payments Upon Separation | | | | | | Annual Compensation per the Summary Compensation Table(1) | Voluntary Resignation/ Termination | Death or Disability | Retirement | Termination Other Than For Cause/ Resignation For Good Reason within One Year of Change of Control | | John B. Gibson | | | | | | | Base Salary(2) | | $— | $— | $— | $1,850,000 | | Annual Incentive(3) | | — | 881,448 | 881,448 | 2,775,000 | | Stock Options(4) | | — | — | — | — | | Time-Based Stock Awards(5) | | — | 3,798,320 | 2,919,390 | 3,798,320 | | Performance-Based Stock Awards(6) | | — | 6,864,535 | 3,348,816 | 6,864,535 | | Benefits(7) | | — | — | — | 48,530 | | Total | $10,274,543 | $— | $11,544,303 | $7,149,654 | $15,336,385 | | Robert L. Schrader | | | | | | | Base Salary(2) | | $— | $— | $— | $787,500 | | Annual Incentive(3) | | — | 336,656 | — | 787,500 | | Stock Options(4) | | — | — | — | — | | Time-Based Stock Awards(5) | | — | 913,745 | — | 913,745 | | Performance-Based Stock Awards(6) | | — | 1,990,806 | — | 1,990,806 | | Benefits(7) | | — | — | — | 42,670 | | Total | $3,359,326 | $— | $3,241,207 | $— | $4,522,221 | | Adam Ante | | | | | | | Base Salary(2) | | $— | $— | $— | $750,000 | | Annual Incentive(3) | | — | 320,625 | — | 750,000 | | Stock Options(4) | | — | — | — | — | | Time-Based Stock Awards(5)(8) | | — | 206,761 | — | 3,256,200 | | Performance-Based Stock Awards(6) | | — | 3,060,107 | — | 3,060,107 | | Benefits(7) | | — | — | — | 42,640 | | Total | $2,827,765 | $— | $3,587,493 | $— | $7,858,947 | | Ryan Bergstrom | | | | | | | Base Salary(2) | | $— | $— | $— | $712,500 | | Annual Incentive(3) | | — | 304,594 | — | 712,500 | | Stock Options(4) | | — | — | — | — | | Time-Based Stock Awards(5)(8) | | — | 206,761 | — | 2,587,620 | | Performance-Based Stock Awards(6) | | — | 2,422,172 | — | 2,422,172 | | Benefits(7) | | — | — | — | 57,391 | | Total | $2,785,790 | $— | $2,933,527 | $— | $6,492,183 |
Potential Benefits Upon Separation from Company
| | | Potential Payments Upon Separation | | | | | | Annual Compensation per the Summary Compensation Table(1) | Voluntary Resignation/ Termination | Death or Disability | Retirement | Termination Other Than For Cause/ Resignation For Good Reason within One Year of Change of Control | | Chad Parodi | | | | | | | Base Salary(2) | | $— | $— | $— | $712,500 | | Annual Incentive(3) | | — | 304,594 | — | 712,500 | | Stock Options(4) | | — | — | — | — | | Time-Based Stock Awards(5) | | — | 406,541 | — | 406,541 | | Performance-Based Stock Awards(6) | | — | 1,140,194 | — | 1,140,194 | | Benefits(7) | | — | — | — | 35,730 | | Total | $2,455,364 | $— | $1,851,329 | $— | $3,007,465 |
CEO Pay Ratio
CEO Pay Ratio Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to provide the ratio of the annual total compensation of Mr. Gibson, our CEO, to the annual total compensation of our median employee. To identify our median employee for fiscal 2026, we took the following steps:
CEO Pay Ratio
| • | We identified our global employee population of approximately 17,300 employees, excluding our CEO, who were employed by us on March 1, 2026. Approximately 87% of our employees are located in the U.S. and 13% are located in jurisdictions outside the U.S. We included all employees, whether employed on a full-time, part-time, or seasonal basis; |
CEO Pay Ratio
| • | As permitted by the SEC’s “de minimis” exemption, we adjusted our global employee population to exclude all employees from certain jurisdictions outside of the U.S. (228 in Germany, 242 in Denmark, 197 in Serbia, 11 in Israel, and 4 in Canada); |
CEO Pay Ratio
| • | We identified the median employee by examining the previous 12-month period of W-2 wages for our adjusted global employee population, excluding our CEO, who were employed by us on March 1, 2026; and |
CEO Pay Ratio
| • | We did not make any assumptions, adjustments, or estimates with respect to W-2 wages, however we did annualize the compensation for any full-time or part-time employees that were not employed by us for the entire 12-month period. |
CEO Pay Ratio
We calculated total annual compensation for fiscal 2026 for the median employee using the same methodology we used for our CEO as set forth in the 2026 Summary Compensation Table in this proxy statement. The table below sets forth comparative information regarding: (A) the total annual compensation of our CEO for fiscal 2026; (B) the median of the total annual compensation of all other employees of the Company, excluding employees of certain non-U.S. jurisdictions and our CEO, for fiscal 2026; and (C) the ratio of the CEO total annual compensation to the median of the total annual compensation of all other employees, excluding employees of certain non-U.S. jurisdictions and our CEO:
CEO Pay Ratio
| Mr. Gibson, our CEO, total annual compensation (A) | $10,274,543 | | Median employee total annual compensation (B) | $71,890 | | Ratio of CEO to median employee compensation (C) | 143:1 |
Pay Versus Performance
Pay Versus Performance In accordance with rules adopted by the SEC, we provide the following disclosure regarding executive compensation for our principal executive officers (“PEO”) and Non-PEO NEOs and Company performance for the fiscal years listed below.
Pay Versus Performance
| Fiscal Year (a) | | | | | Average Summary Compensation Table Total for Non-PEO NEOs (2) (d) | Average Compensation Actually Paid to Non-PEO NEOs (2)(3) (e) | Value of Initial Fixed $100 Investment Based On: | | Net Income (in millions) (h) | Operating Income, Net of Certain Items (5) (in millions) (i) | | | Summary Compensation Table Total for PEO | | Compensation Actually Paid to PEO | | | | Total Shareholder Return (f) | Peer Group Total Shareholder Return (4) (g) | | | | | Gibson (1) (b) | Mucci (1) (b) | Gibson (1)(3) (c) | Mucci (1)(3) (c) | | | | | | | | 2026 | $10,274,543 | $— | $(3,354,147) | $— | $2,857,061 | $(631,232) | $111.45 | $91.70 | $1,760 | $2,604 | | 2025 | $8,807,411 | $— | $16,426,552 | $— | $2,893,402 | $6,848,997 | $174.22 | $147.00 | $1,657 | $2,189 | | 2024 | $7,534,855 | $— | $8,462,562 | $— | $2,498,637 | $2,602,402 | $128.88 | $121.01 | $1,690 | $2,054 | | 2023 | $6,680,180 | $14,442,172 | $5,660,044 | $(3,614,572) | $2,691,157 | $1,782,985 | $109.19 | $95.92 | $1,557 | $1,933 | | 2022 | $— | $11,025,026 | $— | $23,305,787 | $3,257,026 | $5,846,642 | $125.34 | $93.33 | $1,393 | $1,782 |
Pay Versus Performance
| (1) John B. Gibson has served as PEO since fiscal 2023 following October 13, 2022. Martin Mucci served as PEO during fiscal 2023 through October 13, 2022, and in fiscal 2022. The amounts deducted and added in calculating Compensation Actually Paid (“CAP”) for Mr. Gibson for fiscal 2026 are as follows: |
Pay Versus Performance
| | 2026 | | Summary Compensation Table Total | $10,274,543 | | Deduction of stock awards and option awards reported in the Summary Compensation Table | (8,453,498) | | Fiscal year-end value of equity awards granted during the fiscal year that remained unvested as of the last day of the fiscal year | 4,184,473 | | Change in fair value from the last day of the prior fiscal year to the last day of the fiscal year of unvested equity awards that were granted in a prior year | (8,073,194) | | Change in fair value from the last day of the prior fiscal year to the vesting date during the fiscal year of awards granted in a prior year that vested during the most recent fiscal year | (1,461,295) | | Value of dividends or other earnings paid on equity awards not otherwise included | 174,824 | | Compensation Actually Paid | $(3,354,147) |
Pay Versus Performance
| (2) The individuals comprising the Non-PEO NEOs for each year are as follows: |
Pay Versus Performance
| 2022 | 2023 | 2024 | 2025 | 2026 | | Efrain Rivera | Efrain Rivera | Robert L. Schrader | Robert L. Schrader | Robert L. Schrader | | John B. Gibson | Mark A. Bottini | Efrain Rivera | Adam Ante | Adam Ante | | Mark A. Bottini | Michael E. Gioja | Mark A. Bottini | Mark A. Bottini | Ryan Bergstrom | | Michael E. Gioja | Stephanie L. Schaeffer | Michael E. Gioja | Michael E. Gioja | Chad Parodi | | | | Elizabeth Roaldsen | | |
Pay Versus Performance
The amounts deducted and added in calculating the average CAP for these NEOs for fiscal 2026 are as follows:
Pay Versus Performance
| | 2026 | | Summary Compensation Table Total | $2,857,061 | | Deduction of stock awards and option awards reported in the Summary Compensation Table | (2,013,906) | | Fiscal year-end value of equity awards granted during the fiscal year that remained unvested as of the last day of the fiscal year | 996,878 | | Change in fair value from the last day of the prior fiscal year to the last day of the fiscal year of unvested equity awards that were granted in a prior year | (1,817,669) | | Change in fair value from the last day of the prior fiscal year to the vesting date during the fiscal year of awards granted in a prior year that vested during the most recent fiscal year | (761,136) | | Value of dividends or other earnings paid on equity awards not otherwise included | 107,540 | | Compensation Actually Paid | $(631,232) |
Pay Versus Performance
| (3) The amounts shown for CAP have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect the actual compensation realized or received by our NEOs. |
Pay Versus Performance
| (4) The Peer Group TSR set forth in this table utilizes the Company’s peer group used for executive compensation market comparative purposes which was also utilized in the stock performance graph required by Item 201(e) of Regulation S-K included in our Form 10-K. |
Pay Versus Performance
| (5) Operating income, net of certain items is a non-GAAP measure. Refer to “Paychex, Inc. Non-GAAP Financial Measures” in Appendix A of this proxy statement for a discussion of this non-GAAP measure and a reconciliation to the most comparable GAAP measure of operating income. |
Pay Versus Performance Relationships
Pay Versus Performance Relationships The following chart sets forth the relationship between CAP to our PEOs, the average of CAP to our Non-PEO NEOs, and the Company’s cumulative TSR over the five most recently completed fiscal years. In addition, the following chart compares the Company’s cumulative TSR over the five most recently completed fiscal years to that of the Company’s fiscal 2026 Peer Group. Non-PEO NEOs, and the Company’s consolidated Net Income during the five most recently completed fiscal years. The following chart sets forth the relationship between CAP to our PEOs, the average of CAP to our Non-PEO NEOs, and the Company’s Operating Income, Net of Certain Items during the five most recently completed fiscal years. Paychex, Inc. 2026 Proxy Statement