Michael A. Bonarti
AUTOMATIC DATA PROCESSINGAbout Michael A. Bonarti
Michael A. Bonarti is Chief Administrative Officer at ADP, responsible for legal, global security and transformation. He joined ADP in May 1997 as a corporate attorney (M&A), became interim General Counsel in April 2010, and was appointed Corporate VP, General Counsel & Secretary in June 2010. He holds a J.D. from the University of Chicago Law School and a B.A. from Cornell University . Under ADP’s FY2025 performance framework, the company delivered $20.6B revenue, 10% EPS growth to $9.98, record client satisfaction, and 92.1% Employer Services retention; FY2025 PSU metrics paid at 132% and the FY2023 PSU cycle (ended FY2025) paid 137% after a 68.1st percentile rTSR outcome .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| ADP | Chief Administrative Officer | Not disclosed (current) | Oversees legal, global security, transformation; executive security/cyber oversight routinely reported to Board committees . |
| ADP | Corporate VP, General Counsel & Secretary | 2010–(tenure continued as CAO thereafter) | Led global legal org with transformational initiatives; corporate governance and risk management . |
| ADP | Corporate attorney (M&A), roles with expanding legal oversight (domestic/international) | 1997–2010 | Supported ADP’s acquisitions and legal oversight across businesses . |
| Shearman & Sterling | Associate (M&A, corporate finance) | Pre-1997 | US/international transactions experience . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Corporate Compliance Insights | Contributing author | 2021 | Authored HR compliance article; not a governance role . |
Fixed Compensation
Multi-year compensation (as reported in ADP’s Summary Compensation Table):
| Metric (USD) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Base Salary | $624,000 | $642,700 | $655,600 |
| Stock Awards (RSUs/PSUs grant-date fair value) | $3,742,047 | $3,638,626 | $4,049,051 |
| Non-Equity Incentive Plan (Annual Bonus) | $678,900 | $798,900 | $702,100 |
| Change in Pension Value/Nonqualified Deferral Earnings | $0 | $28,439 | $136,013 |
| All Other Compensation | $132,600 | $167,353 | $176,751 |
| Total | $5,177,547 | $5,276,018 | $5,719,515 |
Additional fixed/other detail (FY2025):
- Base salary increased 2% in FY2025 for NEOs; Bonarti’s target annual bonus set at 100% of salary ($655,600) .
- All Other Compensation includes 401(k) match ($20,850), Executive Retirement Plan company contribution ($87,766), auto lease cost ($19,687), life/AD&D premiums ($948), and ADP Foundation matching gifts ($47,500) .
Performance Compensation
Annual Cash Bonus Plan (FY2025)
| Component | Weight | Target | Actual/Result | Achievement |
|---|---|---|---|---|
| Revenue Growth | 20% | 5.7% | 7.1% (ex-FX over target assumptions) | 147.8% |
| New Business Bookings Growth | 20% | 7.8% | 3.5% | 56.9% |
| Adjusted EBIT Growth | 20% | 8.8% | 9.7% (ex-FX over target assumptions) | 117.7% |
| Client Satisfaction (retention; NPS) | 10% total | Retention goal 92.0% | 92.1% achieved; NPS goals achieved | 125.8% (retention) / 133.3% (NPS) |
| Transformation (5 sub-metrics) | 20% | Internal targets | Mixed (e.g., gen-AI adoption 131.0%, digital sales 0.0%) | See sub-metrics |
| Paperless & HCM (2 sub-metrics) | 10% | e.g., paperless pays 83.0% | 83.9% (paperless); HCM goals achieved | 145.0% (paperless) / 80.6% (HCM) |
| Overall Bonus Payout | — | — | — | 107.1% of target for NEOs |
Plan mechanics: Bonus target percentages set 100–200% of salary by role; max payout 200% of target; no guaranteed minimum; formulaic goals aligned to guidance set at year start .
Long-Term Incentives (PSUs/RSUs)
- FY2025 PSU performance metrics: Adjusted Net Income growth (67% weight) and Revenue ex-ZMPT growth (33% weight); three 1-year goals over a 3-year performance period with +/-20% rTSR modifier vs S&P 500; maximum 200% of target (capped at target if absolute 3-yr TSR negative) .
- FY2025 PSU results: Adj. Net Income +10.6% vs 7.9% target; Revenue ex-ZMPT +6.2% vs 5.6% target; Year payout 132% (applies to FY2025 Year 1, FY2024 Year 2, FY2023 Year 3) .
- FY2023 PSU cycle outcome (ended FY2025): rTSR 68.1st percentile; rTSR modifier 114.5%; final payout 137% .
| PSU Metric (FY2025) | Target | Result | Year Payout |
|---|---|---|---|
| Adjusted Net Income Growth (67%) | 7.9% | 10.6% (ex-FX/acquisitions impact per plan) | 132% (aggregate year factor) |
| Revenue ex-ZMPT Growth (33%) | 5.6% | 6.2% (ex-FX/acquisitions) | 132% (aggregate year factor) |
| 3-year rTSR modifier (FY2023 grant) | — | 68.1 percentile vs S&P 500 | 114.5% modifier; 137% final payout |
Equity Grants, Vesting, and Outstanding Awards
FY2025 Grants (September 1, 2024)
| Award Type | Shares (Target) | Threshold | Maximum | Grant-Date FV (USD) |
|---|---|---|---|---|
| PSU Tranche (5) | 3,241 | 1,621 | 6,482 | $960,665 |
| PSU Tranche (6) | 3,286 | 1,643 | 6,573 | $978,604 |
| PSU Tranche (7) | 3,568 | 1,784 | 7,137 | $1,054,978 |
| RSU | 3,823 | — | — | $1,054,804 |
Vesting schedules (select awards; as of FY-end 2025):
- Options: 9/1/2021 grant vests 25% annually on each 9/1 through 9/1/2025 .
- RSUs: 9/1/2022 grant vests 33% annually on 9/1/2023, 9/1/2024, 9/1/2025; 9/1/2023 and 9/1/2024 grants vest 33% annually on each 9/1/2024–2027; certain PSU awards settle 100% at 6/30/2026 or 6/30/2027 (end of performance period) .
Outstanding equity at 6/30/2025 (selected line items)
| Category | Detail | Amount |
|---|---|---|
| Options (unexercised) | 9/1/2021 unexercisable; strike $206.86; exp. 8/31/2031 | 6,812 options |
| Unvested RSUs | 9/1/2022 | 1,131 sh; $348,800 MV |
| 9/1/2023 | 2,309 sh; $712,096 MV | |
| 9/1/2024 | 3,823 sh; $1,179,013 MV | |
| Unearned PSUs (in-cycle) | 9/1/2023 grant | 7,986 sh; $2,462,818 PV |
| 9/1/2024 grant | 4,710 sh; $1,452,626 PV |
Realizations in FY2025 (liquidity/selling pressure indicators):
- Option exercises: 64,557 shares; value realized $7,043,104 .
- Stock vested: 15,827 shares; value realized $4,141,741 .
- ADP policy requires executive transactions executed under 10b5‑1 plans; hedging and pledging are prohibited .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial ownership (8/15/2025) | 97,581 shares |
| Shares outstanding (record date 9/15/2025) | 405,089,516 |
| Ownership as % of outstanding | ~0.02% (97,581 ÷ 405,089,516) |
| Stock ownership guideline | 3× base salary for NEOs; all NEOs met guidelines at FY2025 end |
| Hedging/Pledging | Prohibited for executives and directors |
| Clawback | Robust policy; exceeds Nasdaq; mandatory restatement clawback compliant |
Employment Terms
Severance and Change-in-Control (CIC) Structure
| Provision | Terms |
|---|---|
| CIC Severance multiple | 1.5× base salary + 1.5× avg bonus (2 prior calendar years) for NEOs other than CEO |
| CIC equity vesting | Double-trigger acceleration (termination without cause or for good reason within 2 years post-CIC) |
| Non-CIC severance (Corporate Officer Severance Plan) | 18 months salary continuation; pro‑rated bonus; continued vesting of equity during salary continuation (PSUs subject to proration); CEO at 24 months |
| Tax gross-ups | No 280G or 409A tax gross‑ups |
| Clawback | Recovery of cash/equity incentive comp in misconduct or restatement scenarios |
Illustrative Payouts (as of 6/30/2025; company’s scenario table)
| Scenario | Cash (Severance/Bonus) | Options | RSUs | PSUs | Health/Pension | Total |
|---|---|---|---|---|---|---|
| Termination following CIC | $2,100,450 (1.5× salary and avg bonus) | $691,690 | $2,239,909 | $6,477,971 | $100,000 health | $11,610,020 |
| Involuntary termination (no CIC) | $983,400 (1.5× salary; pro‑rated bonus paid separately) | $691,690 | $2,239,909 | $7,284,182 | $100,000 health | $11,299,181 |
| Death/Disability | $0 cash | $691,690 | $1,891,109 | $7,284,182 | $100,000 health; $541,172 SORP (disability) | $9,866,981 (death) / $10,508,153 (disability) |
Notes: PSU treatment reflects actual achievements for completed years (FY2024 at 111%, FY2025 at 132%) and target for remaining years; values include accrued dividend equivalents through 6/30/2025 .
Deferred Compensation and Retirement
| Plan | Company Contributions (FY2025) | Earnings (FY2025) | Aggregate Balance (6/30/2025) |
|---|---|---|---|
| Executive Retirement Plan (ERP) | $95,144 | $63,178 | $566,310 |
SORP (legacy supplemental pension) formula limits at 45% of final average pay; benefits forfeitable for non‑compete breaches within 24 months post‑termination .
Compensation Structure Analysis (signals)
- Mix and leverage: High at‑risk pay via bonus and PSUs, with strong line‑of‑sight to revenue, adjusted EBIT and adjusted net income; rTSR modifier adds external accountability .
- FY2025 bonus paid slightly above target (107.1%), reflecting strong revenue and EBIT offset by softer new bookings .
- Multi-year PSU outcomes show healthy over‑target achievement (132% for FY2025 year; 137% for 2023 cycle), indicating consistent delivery against growth metrics and competitive TSR .
- Governance: Double‑trigger CIC; no hedging/pledging; robust clawback; no repricing; no 280G/409A gross‑ups—shareholder‑friendly constructs .
Risk Indicators & Red Flags
- Insider selling pressure: Significant FY2025 realizations (64,557 option shares exercised; $7.04M value realized; $4.14M of stock vested) indicate regular liquidity events around vesting/exercise windows; transactions executed under 10b5‑1 per policy .
- Pledging/hedging: Prohibited—reduces alignment risk .
- Say‑on‑pay: ~90% approval at 2024 annual meeting—low external compensation controversy .
- Related party/other: No specific related‑party items disclosed for Bonarti; general policy oversight in place .
Equity Ownership & Alignment Details
- Beneficial ownership of ~0.02% of outstanding shares with additional in‑cycle PSUs and unvested RSUs; executive ownership guidelines of 3× salary met at FY2025 end .
- Vesting calendar concentration around September 1 and fiscal year-end performance settlements (June 30) suggests predictable periodic supply into the market from RSU/PSU settlements and option activity .
Investment Implications
- Alignment: Strong pay-for-performance architecture (revenue/EBIT/adjusted NI, rTSR modifier) and ownership/anti‑hedging rules support investor alignment .
- Retention: Competitive equity mix with multi‑year PSU cycles, ownership guidelines, and severance protections (non‑CIC and CIC) reduce near‑term retention risk .
- Trading/flow: Expect episodic selling pressure around annual 9/1 RSU tranches and PSU settlements and as 9/1/2021 options reach full vest/expiration schedule; FY2025 realized values evidence meaningful liquidity events .
- Performance execution: Over‑target PSU outcomes and above‑target bonus despite softer new bookings underscore execution on profitability and revenue, with client retention/NPS strengths—key for ADP’s recurring model .
- Governance risk low: Double‑trigger CIC, no tax gross‑ups, robust clawback, and no pledging/hedging reduce governance and alignment red flags .
Monitor: (i) future Form 4s near September and fiscal year-end; (ii) FY2026 bonus plan weighting shift (higher client retention weight); (iii) PSU rTSR outcomes versus S&P 500 peers; and (iv) any role changes affecting severance eligibility or equity treatment .