Sreeni Kutam
AUTOMATIC DATA PROCESSINGAbout Sreeni Kutam
Sreeni Kutam is President, Global Product & Innovation at ADP, leading product, technology and innovation since January 2023; he joined ADP in 2014 and previously served as Chief Human Resources Officer (2018–2022). He is 55 years old. Under his tenure in product leadership, ADP delivered FY2025 revenue of $20.6B and 10% EPS growth (to $9.98), with adjusted EBIT growth of 9.7% and a three-year TSR of 55.3% (68.1st percentile vs S&P 500, applying a +114.5% rTSR modifier to FY2023 PSU awards). These company outcomes directly drive his incentive pay via revenue growth, bookings growth, adjusted EBIT, adjusted net income and revenue ex-ZMPT metrics and rTSR modifiers .
Past Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| ADP | President, Global Product & Innovation | 2023–present | Oversees product and innovation; appointed Jan-2023 |
| ADP | Chief Human Resources Officer | 2018–2022 | Interim CHRO Jan–Jun 2018; CHRO Jun 2018–Dec 2022 |
| ADP | Division VP, HR, Major Account Services | 2016–2018 | HR leadership for MAS |
| ADP | VP, HR Strategy & Planning | 2014–2016 | Joined ADP in 2014 |
| Prior to ADP | HR Consultant | pre-2014 | External HR consulting experience |
Fixed Compensation (FY2025)
| Component | FY2025 | Source |
|---|---|---|
| Base Salary | $577,800 | |
| Target Bonus % of Salary | 100% | |
| Actual Annual Bonus Paid | $618,800 (107.1% of target) | |
| All Other Compensation | $157,138 total; includes auto ($20,407), 401(k) match ($20,850), ERP contribution ($74,878), life/AD&D ($835), employee recognition ($15), matching charitable contributions ($40,150), tax assistance $3 |
Performance Compensation
Annual Cash Bonus Plan (FY2025)
| Metric | Weight | Target | Actual | Payout vs Target |
|---|---|---|---|---|
| Revenue Growth | 20% | 5.7% | 7.1% ex-FX | 147.8% |
| New Business Bookings Growth | 20% | 7.8% | 3.5% | 56.9% |
| Adjusted EBIT Growth | 20% | 8.8% | 9.7% ex-FX | 117.7% |
| Client Satisfaction (retention/NPS) | 10% | Targets per plan | 92.1% retention; NPS goal achieved | 125.8% retention; 133.3% NPS |
| Transformation | 20% | Multi-factor | Mixed (e.g., AI adoption 131.0%) | See submetrics |
| Paperless & HCM | 10% | Multi-factor | Paperless 83.9% | 145.0% paperless; HCM goals 80.6% |
| Result (weighted) | — | — | — | 107.1% overall payout |
Notes: The plan is formulaic; non-financial objectives are quantitatively set; FY2025 bonuses for NEOs paid at 107.1% of target .
Long-Term Incentive (LTI) Structure and FY2025 Performance
- Mix: 75% PSUs, 25% RSUs for NEOs .
- PSU metrics: Adjusted Net Income Growth (67%) and Revenue ex-ZMPT Growth (33%); three 1-year tranches averaged over 3 years; rTSR modifier (+/-20%) vs S&P 500; cap 200% and capped at 100% if absolute 3-year TSR negative .
- FY2025 achievement: Adj. NI +10.6% (141% of target, weighted 67%); Revenue ex-ZMPT +6.2% (115% of target, weighted 33%); Combined payout for FY2025 tranche = 132% .
- rTSR outcome for FY2023 grant (3-year ended 6/30/25): 68.1 percentile; modifier +114.5%; final FY2023 PSU payout 137% .
FY2025 Equity Grants to Kutam
| Grant Date | Award Type | Tranche/Program | Target Units | Grant Date Fair Value ($) | Vesting/Settlement |
|---|---|---|---|---|---|
| 9/1/2024 | PSU | FY2022 grant – Tranche 3 (ASC timing) | 2,719 | $806,038 | Pays Sep-2025 (post 3-year cycle) |
| 9/1/2024 | PSU | FY2023 grant – Tranche 2 | 3,147 | $937,213 | Pays Sep-2026 |
| 9/1/2024 | PSU | FY2025 grant – Tranche 1 | 3,251 | $961,060 | Pays Sep-2027 |
| 9/1/2024 | RSU | Time-based RSUs | 3,483 | $960,995 | 33% on 9/1/2025, 33% on 9/1/2026, 33% on 9/1/2027 |
PSU program payout mechanics and vesting timing per plan; rTSR modifier applies to full 3-year period .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 53,059 shares; less than 1% of outstanding |
| Options Outstanding | 3,690 exercisable; 3,690 unexercisable; strike $206.86; expire 8/31/2031 |
| Unvested RSUs (FV at 6/30/25 $308.40/sh) | 1,906 (9/1/2023, $587,810) and 3,483 (9/1/2024, $1,074,157) |
| Unearned PSUs (FV at 6/30/25) | 7,648 (9/1/2023, $2,358,649) and 4,291 (9/1/2024, $1,323,307); subject to rTSR modifier |
| FY2025 Equity Vesting Schedule (select) | PSUs (9/1/2023) settle 6/30/2026; PSUs (9/1/2024) settle 6/30/2027; RSUs vest 33% annually (2023, 2024 grants) |
| Ownership Guidelines | NEOs: 3x base salary; all NEOs met guideline as of FY2025 |
| Hedging/Pledging | Prohibited for executives and directors |
| Trading Practices | Exec transactions executed under 10b5-1 programs |
| FY2025 Realizations | Options exercised: 44,982 shares, value realized $6,312,742; Stock vested: 9,188 shares, value $2,414,855 |
Employment Terms
Severance and Change-in-Control (CIC)
| Provision | Terms | Source |
|---|---|---|
| CIC Cash Multiple | 1.5x current total annual compensation (salary + 2-year average cash bonus; CEO at 2.0x) | |
| CIC Equity Treatment | Full vesting of options and RSUs; PSUs at 100% target for ongoing programs | |
| CIC Trigger | Double trigger: qualifying termination without cause or for good reason within 2 years post-CIC | |
| Severance (non-CIC) | 18 months base salary continuation (24 months CEO), prorated annual bonus (based on actual), continued vesting of time-based awards during severance period; PSUs prorated on actual performance | |
| “Cause” / “Good Reason” | As defined in plans (e.g., willful misconduct, material diminution of role, etc.) | |
| Clawback | Robust clawback exceeding Nasdaq, includes restatement-based recovery | |
| Restrictive Covenants | Award and severance participation conditioned on non-compete/non-solicit/confidentiality (as permitted by law) | |
| Tax Gross-Ups | None under CIC and deferred comp programs |
Potential Payments to Sreeni Kutam at 6/30/2025
| Scenario | Cash Termination Payment | Options | RSUs | PSUs | Total |
|---|---|---|---|---|---|
| CIC + Qualifying Termination | $1,828,875 | $374,683 | $1,967,900 | $6,048,122 | $10,219,580 |
| Involuntary (non-CIC) | $866,700 | $374,683 | $1,967,900 | $6,803,610 | $10,012,893 |
| Death/Disability | — | $374,683 | $1,661,968 | $6,803,610 | $8,840,261 |
Notes: “Cash Termination Payment” reflects plan multiples; equity values assume $308.40 share price and specified performance assumptions; PSUs under non-CIC use actual performance for completed years and target for remaining per table footnotes .
Compensation Structure Analysis
- High at-risk mix and performance coupling: FY2025 bonus paid at 107.1% on formulaic metrics; PSU tranches earned at 132% for FY2025 based on adjusted NI and revenue ex-ZMPT, with rTSR modifier overlay, aligning realized equity to stockholder returns .
- Shift away from options: ADP ceased granting options from FY2023, favoring PSUs/RSUs; reduces upside convexity and re-pricing risk; no repricing without stockholder approval .
- Governance safeguards: No hedging/pledging; robust clawback; stock ownership guidelines met; say-on-pay 90% approval in 2024 support alignment with investor expectations .
Additional Context on Company Performance and Strategic Execution (Relevance to Incentives)
- FY2025: Revenue $20.6B; EPS +10% to $9.98; Employer Services bookings +3%; high client satisfaction; strategic initiatives in AI and workforce management (e.g., acquisition of WorkForce Software) .
- FY2024: Revenue $19.2B; EPS +11% to $9.10; bookings +6.3%; deployment of ADP Assist (GenAI) .
These outcomes feed directly into the annual and PSU performance metrics driving Kutam’s incentive payouts .
Investment Implications
- Incentive alignment: Kutam’s pay is highly contingent on multi-year adjusted earnings and revenue growth and modified by relative TSR; FY2025 over-achievement (132% PSU tranche) signals upside leverage to sustained operating performance and share-price relative outperformance .
- Limited selling pressure from policy and design: Hedging/pledging is prohibited and ownership guidelines are met, though FY2025 realized option exercises ($6.3M) and vesting ($2.4M) indicate liquidity events consistent with long-dated awards; ongoing vesting through 2027 supports retention .
- Downside protection/governance: Double-trigger CIC, no tax gross-ups, and strict clawback reduce governance risk; severance at 1.5x (non-CEO) with prorated performance preserves pay-for-performance even upon separation .
- Strategic execution linkage: As product/innovation leader during ADP’s GenAI rollout and platform modernization, Kutam’s incentives are directly tied to metrics reflecting that strategy (revenue ex-ZMPT, adjusted NI, client satisfaction), aligning leadership focus with durable value drivers .