Karen S. Lynch
AUTOMATIC DATA PROCESSINGAbout Karen S. Lynch
Karen S. Lynch (age 62) is an independent director nominee at ADP, formerly President and CEO of CVS Health (2021–2024), with earlier roles as EVP at CVS Health (2018–2021) and President of Aetna (2015–2021). She began her career as a certified public accountant at Ernst & Young, bringing financial and accounting expertise alongside leadership experience in highly regulated, complex enterprises . She is listed as “New” in ADP’s 2025 director slate, indicating first-time nomination for this board and independence under Nasdaq standards .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| CVS Health Corporation | President & CEO | 2021–2024 | Led a large, highly regulated enterprise; brings strategic planning, risk management, financial and accounting expertise to ADP’s board . |
| CVS Health Corporation | Executive Vice President | 2018–2021 | Senior leadership in a complex, regulated environment . |
| Aetna (acquired by CVS Health in 2018) | President | 2015–2021 | Operated within complex regulatory frameworks; business acumen and risk oversight credentials . |
| Ernst & Young LLP | Certified Public Accountant | Early career | Foundational financial/accounting experience; CPA background . |
External Roles
| Organization | Role | Status | Notes |
|---|---|---|---|
| Thermo Fisher Scientific Inc. | Director | Current | Presently serves on Thermo Fisher’s board . |
| CVS Health Corporation | Director | Prior (within 5 years) | Served on CVS Health board within past five years . |
| U.S. Bancorp | Director | Prior (within 5 years) | Served on U.S. Bancorp board within past five years . |
Interlock signal: ADP’s non-executive Chair, Thomas J. Lynch, previously served on Thermo Fisher’s board until May 2022, creating a network tie to Lynch’s current Thermo Fisher directorship. ADP discloses that ordinary-course relationships with companies where directors serve are not material and do not impede independent judgment .
Board Governance
- Independence: The board determined Lynch meets ADP’s categorical independence standards consistent with Nasdaq listing rules . She is presented as an independent nominee in the 2025 slate .
- Committee assignments: As a new nominee, committee memberships are not listed for Lynch; current committee rosters do not include her yet .
- Attendance and engagement: ADP policy requires directors to attend annual meetings; all directors then in office attended the 2024 annual meeting. FY2025 board held 10 meetings, and incumbent directors met at least 75% aggregate attendance; executive sessions of independent directors occur at each board and committee meeting .
- Board leadership: Independent, non-executive Chair structure; CEO is a separate board member .
- Risk and strategy oversight: Robust multi-committee oversight of ERM, cybersecurity, privacy, M&A/innovation, compensation, and ESG; quarterly reporting cycles and annual strategy/product sessions with board engagement .
Fixed Compensation
| Element | FY2025 | FY2026 Change | Structure/Details |
|---|---|---|---|
| Non-Employee Director Annual Retainer | $360,000 | No change to total | $230,000 paid in Deferred Stock Units (DSUs); $130,000 in cash or DSUs at director’s election . |
| Non-Executive Chair Incremental Retainer | $200,000 | No change to total | $100,000 in DSUs; $100,000 in cash or DSUs; total chair retainer $560,000 at 2024 annual meeting . |
| Committee Chair Retainers | Audit: $25,000; CMDC: $20,000; NCGC: $15,000; CDTC: $15,000 | NCGC and CDTC increase to $17,500 | Payable in cash, deferred, or DSUs at chair’s election . |
| DSU Grant Mechanics | Annual DSU grants on meeting date | — | DSUs credited based on retainer amount divided by closing price; fully vested when credited; dividend equivalents accrue; shares delivered upon end of board service . |
| Stock Ownership Guidelines | 5x annual cash retainer | — | Minimum common stock holding requirement for non-employee directors . |
FY2025 director DSU grant dates and fair values for incumbent directors were November 6, 2024 (illustrative for program design); Lynch did not have FY2025 entries as a new nominee .
Performance Compensation
- ADP does not tie non-employee director pay to financial performance; directors receive retainers (cash/DSUs) and applicable chair fees .
- For governance context (board oversight of pay-for-performance), ADP’s executive compensation metrics in FY2025:
| Annual Cash Bonus Plan Measures | Plan Targets | Plan Results |
|---|---|---|
| Revenue Growth | 5.7% | 7.1% (ex-FX above target assumptions) . |
| New Business Bookings Growth | 7.8% | 3.5% . |
| Adjusted EBIT Growth | 8.8% | 9.7% (ex-FX above target assumptions) . |
| PSU Program Measures | Program Targets | Program Results |
|---|---|---|
| Adjusted Net Income Growth | 7.9% | 10.6% (ex-FX and 1st-year M&A impacts) . |
| Revenue ex-ZMPT Growth | 5.6% | 6.2% (ex-FX and 1st-year M&A impacts) . |
| rTSR Modifier (FY2023 award, 3-year period) | +/-20% | +14.5% at TSR percentile rank 68.1; FY2023 PSU paid at 137% . |
Say-on-pay support: ~90% approval at 2024 annual meeting for NEO compensation, reinforcing investor confidence in ADP’s pay-for-performance framework overseen by independent directors .
Other Directorships & Interlocks
| Person | External Public Boards | Role | Interlock/Notes |
|---|---|---|---|
| Karen S. Lynch | Thermo Fisher Scientific Inc. | Director | Current role; ADP notes board independence and that ordinary-course relationships are not material . |
| Karen S. Lynch | CVS Health Corporation | Director | Prior within 5 years . |
| Karen S. Lynch | U.S. Bancorp | Director | Prior within 5 years . |
| Thomas J. Lynch (ADP Chair) | Thermo Fisher Scientific Inc. | Prior Director (until May 2022) | Historical overlap with Lynch’s current Thermo Fisher role . |
Expertise & Qualifications
- Financial and accounting expertise via CPA background and senior executive roles; seasoned leadership within regulated, multinational businesses; strategic planning and risk management capabilities highlighted by ADP as key skills and qualifications .
- Board skills matrix emphasizes need for financial expertise, ERM, technology/cybersecurity, HR/HCM, transformation, and public company CEO experience—areas aligned with Lynch’s profile .
Equity Ownership
| Holder | Shares Beneficially Owned | Percent of Outstanding | Notes |
|---|---|---|---|
| Karen S. Lynch | 82 | <1% | As of August 15, 2025; directors receive DSUs annually upon service—Lynch is a new nominee . |
| Hedging/Pledging Policy | — | — | ADP prohibits hedging of ADP securities and pledging/margin accounts for directors and employees . |
| Ownership Guidelines | — | — | Non-employee directors must hold at least 5x annual cash retainer; compliance timing for new directors not specified . |
Governance Assessment
- Independence and Board Fit: Lynch meets Nasdaq independence standards; her regulated-industry CEO experience and financial/accounting background align with ADP’s board skills priorities, supporting board effectiveness in risk and strategy oversight .
- Committees and Engagement: As a new nominee, committee roles are pending; ADP’s committee structure and cadence (10 board meetings; quarterly cybersecurity/privacy reporting; annual strategy/product session) indicate strong governance processes into which Lynch would integrate .
- Ownership Alignment: Current beneficial ownership is minimal (82 shares), but DSU-based director compensation and 5x cash retainer ownership guidelines, coupled with hedging/pledging prohibitions, enhance alignment over time. Monitor DSU accruals and guideline compliance as her board tenure begins .
- Potential Conflicts/Interlocks: Network tie via Thermo Fisher with ADP’s Chair’s prior board service merits monitoring; ADP discloses that ordinary-course relationships where directors serve are not material and do not impair independence .
- Investor Signals: Strong say-on-pay support (~90%) and clear pay-for-performance metrics (annual and PSU programs) underpin governance credibility; Lynch’s oversight will be part of an established framework with independent committee advisors (FW Cook) and robust clawback/ownership policies .
RED FLAGS to monitor
- Low initial share ownership relative to guidelines until DSUs accrue and guideline compliance is achieved; confirm DSU grants post-election and guideline status in future filings .
- Any emerging related-party transactions tied to external boards (e.g., Thermo Fisher, CVS, U.S. Bancorp); ADP’s Related Persons Transaction Policy requires committee review/approval, with board asserting none material at present .
Overall, Lynch’s profile strengthens ADP’s board with proven large-cap CEO experience and financial rigor, with independence affirmed and no disclosed conflicts; ownership alignment should improve as DSU grants commence under ADP’s director program .