John Gibson
About John Gibson
John B. Gibson, age 59, is President and CEO of Paychex and a non‑independent director since 2022; he became CEO in October 2022 after serving as President & COO and earlier SVP of Service . Company performance under his leadership in fiscal 2025: total service revenue $5.4B (+5% YoY), operating income $2.2B (+2%), GAAP diluted EPS $4.58 (−2%); five‑year TSR is 151% with $6.4B returned to shareholders over five years via dividends and buybacks . Paychex completed its largest acquisition (Paycor) in 2025 to expand upmarket, raised the quarterly dividend 10% to $1.08, and distributed $1.6B to shareholders in FY25 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Paychex, Inc. | President & CEO | Oct 2022 – Present | Led digital expansion, service transformation, and growth of PEO/HR advisory services; oversaw largest acquisition (Paycor) . |
| Paychex, Inc. | President & COO | Dec 2021 – Oct 2022 | Executive leadership and operational oversight . |
| Paychex, Inc. | SVP of Service | May 2013 – Dec 2021 | Key leader in service transformation and expansion of HR advisory services . |
| Convergys (now Concentrix) | President, HR Management division | Jun 2004 – Jun 2010 | Led HR outsourcing/software operations . |
| Ameritech (now AT&T) | Vice President, Sales & Service | Apr 1989 – Nov 1999 | Commercial leadership in telecom services . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No other current public company directorships disclosed for Mr. Gibson in the proxy . |
Board Governance and Service
- Board service: Director since 2022; serves on Corporate Development Advisory and Executive Committees; non‑independent (CEO) .
- Leadership structure: Chairman and CEO roles separated (Chair: Martin Mucci); Lead Independent Director: Joseph M. Tucci; all standing committees chaired by independent directors; executive sessions of independent directors held at each regular board meeting .
- Board activity: Four board meetings in FY2025; average attendance ~96%; all directors attended the 2024 annual meeting .
- Director pay: As CEO, Mr. Gibson receives no additional compensation for board service .
Fixed Compensation
| Year | Base Salary ($) | Other Fixed Pay/Perqs |
|---|---|---|
| 2023 | 730,673 | Standard benefits/401(k) match; company states “no significant perquisites” for NEOs . |
| 2024 | 922,211 | 401(k) match included in “All Other Compensation” ($17,807) . |
| 2025 | 900,000 | 401(k) match included in “All Other Compensation” ($16,644) . |
Notes:
- Employment is at‑will; Paychex does not use employment contracts for NEOs .
- Insider trading policy: window opens 2nd business day after earnings; hedging/shorting/options trading on company stock prohibited .
Performance Compensation
Annual Incentive (FY2025 design and outcomes – CEO)
| Metric | YoY growth threshold | Target | Max | FY2025 Achievement vs Target | CEO target opportunity (% of base) | CEO achieved (% of base) |
|---|---|---|---|---|---|---|
| Service revenue | 1.2% | 5.5% | 7.6% | 100.0% | 37.5% | 37.5% |
| Operating income (net of certain items) | 2.4% | 6.6% | 8.8% | 99.3% | 55.0% | 48.9% |
| Annualized new business revenue | 2.0% | 4.0% | 7.2% | 0.0% | 37.5% | —% |
| Qualitative goals | — | — | — | Committee discretion | up to 20.0% | 20.0% |
| Total payout | — | — | — | — | 150.0% | 106.4% |
- Actual annual incentive paid (FY2025): $957,375 to Mr. Gibson (106.4% of base salary) .
- FY2025 metrics and weights reflect balanced growth/profit focus; “operating income, net of certain items” is non‑GAAP as defined in Appendix A .
Long‑Term Incentives (FY2025 grants and structure)
| Grant type | Grant date | Shares/Options | Key terms |
|---|---|---|---|
| Performance‑based RSUs (at target) | 7/15/2024 | 34,531 | Three‑year performance period (service revenue and operating income, net of certain items, equally weighted); final payout adjusted ±25% by relative TSR vs S&P 500; 0–200% payout; vests at 3rd anniversary after certification . |
| Stock options | 7/15/2024 | 64,126 | 10‑year term; exercise price $121.63; vest 1/3 annually over three years . |
| Time‑based RSUs | 7/15/2024 | 8,633 | Vest 1/3 annually over three years . |
Program evolution (alignment signals):
- Increased performance‑based equity to 60% of CEO/CFO grant at target (from 50%) and extended PSU performance horizon to 3 years; added relative TSR modifier to further tie outcomes to shareholder returns .
- Clawback policy compliant with SEC/Nasdaq adopted Oct 2023 covering incentive‑based compensation for 3 prior fiscal years upon a restatement .
- Non‑compete/non‑solicit and forfeiture provisions allow cancellation/recoupment of awards upon violations .
CEO Reported Pay (Summary Compensation Table)
| Metric (USD) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Salary | 730,673 | 922,211 | 900,000 |
| Stock awards | 3,299,902 | 4,024,955 | 5,183,393 |
| Option awards | 1,200,009 | 1,725,007 | 1,749,999 |
| Non‑equity incentive | 1,429,782 | 844,875 | 957,375 |
| All other comp | 19,814 | 17,807 | 16,644 |
| Total | 6,680,180 | 7,534,855 | 8,807,411 |
Equity Ownership & Alignment
| Component (as of July 31, 2025) | Amount |
|---|---|
| Shares owned | 41,368 |
| RSUs vesting by Sep 29, 2025 | — |
| Options exercisable by Sep 29, 2025 | 234,533 |
| Total beneficial ownership | 275,901 |
| Ownership as % of shares outstanding | <1% |
Stock ownership and trading safeguards:
- Executive stock ownership guidelines: CEO 6x base salary; all NEOs currently compliant .
- Hedging/pledging prohibited for directors and officers .
- Insider trading windows and blackout policy in effect .
Vesting calendar (supply overhang indicators):
- Options vesting (shares): FY2026 56,716; FY2027 42,570; FY2028 21,376 .
- Stock awards vesting (shares): FY2026 33,703; FY2027 27,225; FY2028 2,878 .
- Option/stock award exercises in FY2025: No option exercises reported for Mr. Gibson; RSU/stock vesting totaled 18,291 shares across multiple grants (value realized detail provided) .
Employment Terms
- No employment agreement; at‑will employment for NEOs .
- Change‑in‑control (CIC) plan (double trigger within 12 months post‑CIC): CEO multiple = 2.0x base salary and target bonus; immediate vesting of time‑based equity; pro‑rated target vesting for performance‑based equity; benefits continuation aligned with multiplier; no 280G tax gross‑ups .
- Non‑compete/non‑solicit and forfeiture provisions embedded in equity awards; clawback policy applies to annual bonus and PSUs .
- Deferred compensation: CEO deferred $422,437 in FY2025; aggregate balance $4,512,218 as of May 31, 2025 .
CIC and Separation Economics (illustrative, as of May 31, 2025)
| Scenario | Component | Amount ($) |
|---|---|---|
| CIC termination (w/in 12 months; CEO) | Base salary multiple | 1,800,000 |
| Target annual incentive multiple | 2,700,000 | |
| Unvested options (value) | 4,543,728 | |
| Unvested time‑based stock | 10,075,605 | |
| Performance‑based stock at target | 5,452,790 | |
| Benefits continuation | 67,538 | |
| Total | 24,639,661 | |
| Death/Disability | Equity acceleration and bonus (actuals) | 21,029,498 total components for CEO (see table) |
Compensation Committee Analysis and Governance
- Committee: Compensation & Leadership (independent directors) – members in FY2025: Joseph G. Doody (Chair), Pamela A. Joseph, Joseph M. Tucci, Joseph M. Velli .
- Independent consultant: FW Cook; assessed independent; no other services provided to company .
- Peer group (for benchmarking FY2025): ADP; Broadridge; Corpay; Equifax; Euronet; Fair Isaac; Fiserv; Gartner; Global Payments; Intuit; Jack Henry; Moody’s; SS&C; TransUnion; Verisk; WEX .
- Say‑on‑pay: 95% approval at 2024 annual meeting; core plan retained with higher performance tilt in FY2025 .
Performance & Track Record
- FY2025 highlights: Revenue $5.4B (+5%); operating income $2.2B (+2%); adjusted diluted EPS $4.98 (+6%); GAAP EPS $4.58 (−2%) .
- Strategic execution: Largest acquisition (Paycor) expands TAM and mid‑market capabilities; increased quarterly dividend 10% to $1.08; $1.6B total shareholder distributions in FY2025 .
- TSR: Five‑year cumulative TSR 151%; $100 grew to $251 (dividends reinvested) .
Risk Indicators & Red Flags
- Hedging/pledging of stock prohibited (mitigates misalignment) .
- Double‑trigger CIC, no tax gross‑ups; clawback policy compliant with SEC/Nasdaq (reduces risk of windfalls and misconduct) .
- Related‑party transactions disclosed; none involve Mr. Gibson; Board committee oversight in place .
- Section 16 compliance: Company reports timely compliance in FY2025; one late Form 4 was for a different director (Golisano) .
Director Compensation (as Director)
- As an executive director, Mr. Gibson receives no director compensation; CEO compensation disclosed separately (see SCT) .
Equity Ownership & Director Guidelines (Board Level)
- Director ownership guideline: 6x annual board retainer; sales of RSUs restricted during board tenure; hedging/pledging prohibited; all non‑management directors compliant .
Investment Implications
- Pay‑for‑performance alignment: 90% of CEO target pay is at‑risk, with 60% of equity performance‑based and a three‑year horizon plus an rTSR modifier; FY2025 annual bonus paid at 106.4% (below target but supported by service revenue and OI outcomes) .
- Retention and selling pressure: Material scheduled vesting over FY2026‑FY2028 (options: 56.7k/42.6k/21.4k; RSUs: 33.7k/27.2k/2.9k) could modestly increase sellable float; CEO executed no option exercises in FY2025, suggesting limited recent liquidity events .
- Governance quality: Separated Chair/CEO, strong independent leadership (Lead Independent Director), high say‑on‑pay support, prohibition on hedging/pledging, robust clawback, and independent consultant reduce governance risk .
- Change‑in‑control economics: CEO’s CIC package is sizable ($24.64M illustrative) but double‑trigger with performance equity pro‑rated at target; no 280G gross‑ups (balanced retention vs shareholder protection) .
- Execution risk: Annualized new business revenue underperformed threshold in FY2025 (0% payout on that metric), partly offset by service revenue and OI results; continued integration of Paycor is a lever and risk factor for synergy PSUs across the organization .