The Company's share-based compensation consists of stock options, time-based restricted stock, time-based restricted stock units, performance-based restricted stock, and performance-based restricted stock units. The Company also offers an employee stock purchase plan for eligible employees. Beginning in September 2022, the Company discontinued granting stock options, time-based restricted stock and performance-based restricted stock. Any such future awards will be grants of time-based restricted stock units and/or performance-based restricted stock units, depending on employee eligibility. Time-based restricted stock unit awards and performance-based restricted stock unit awards granted to employees with a home country of the United States are settled in stock, and for awards granted to employees with a home country outside the United States are generally settled in cash.

Time-based restricted stock unit awards granted to employees with a home country of the United States are settled in stock and cannot be transferred during the vesting period. Time-based restricted stock unit awards granted to employees with a home country outside the United States are generally settled in cash and cannot be transferred during the vesting period. Compensation expense relating to the issuance of share-settled units is measured based on the fair value of the award on the grant date and recognized on a straight-line basis over the vesting period. Compensation expense relating to the issuance of cash-settled units is recorded over the vesting period and is initially based on the fair value of the award on the grant date and is subsequently remeasured at each reporting date during the vesting period based on the change in the ADP stock price. Dividend cash equivalents are paid on share-settled units, and dividend cash equivalents are not paid on cash-settled units.

•Performance-Based Restricted Stock Units. Performance-based restricted stock units generally vest over a one to three year performance period and a subsequent service period of up to 38 months. Under these programs, the Company communicates “target awards” at the beginning of the performance period with possible payouts at the end of the performance period ranging from 0% to 200% of the “target awards.” Awards are generally forfeited if the employee ceases to be employed by the Company prior to vesting.

Performance-based restricted stock units cannot be transferred and are settled in either cash or stock, depending on the employee's home country. Compensation expense relating to the issuance of performance-based restricted stock units settled in cash is recognized over the vesting period initially based on the fair value of the award on the grant date with subsequent adjustments to the number of units awarded during the performance period based on probable and actual performance against targets. In addition, compensation expense is remeasured at each reporting period during the vesting period based on the change in the ADP stock price. Compensation expense relating to the issuance of performance-based restricted stock units settled in stock is recorded over the vesting period based on the fair value of the award on the grant date with subsequent adjustments to the number of units awarded based on the probable and actual performance against targets. Dividend equivalents are paid on awards under the performance-based restricted stock unit program.

•Employee Stock Purchase Plan. The Company offers an employee stock purchase plan that allows eligible employees to purchase shares of common stock at a price equal to 95% of the market value for the Company's common stock on the last day of the offering period. This plan has been deemed non-compensatory and, therefore, no compensation expense has been recorded.

The Company currently utilizes treasury stock to satisfy stock option exercises, issuances under the Company's employee stock purchase plan, and restricted stock awards. From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase program. The Company repurchased 4.9 million shares in fiscal 2023 as compared to 9.2 million shares repurchased in fiscal 2022. The Company considers several factors in determining when to execute share repurchases, including, among other things, actual and potential acquisition activity, cash balances and cash flows, issuances due to employee benefit plan activity, and market conditions. Cash payments related to the settlement of vested time-based restricted stock units and performance-based restricted stock units were approximately 23.5 million, 22.1 million, and 10.7 million during fiscal years 2023, 2022, and 2021, respectively.


Years ended June 30,	2023		2022		2021
Operating expenses	$	24.6	$	19.7	$	17.9
Selling, general and administrative expenses	165.0		155.7		133.9
System development and programming costs	30.8		26.3		23.5
Total pretax stock-based compensation expense	$	220.4	$	201.7	$	175.3

Income tax benefit	$	54.5	$	49.1	$	43.0

As of June 30, 2023, the total remaining unrecognized compensation cost related to unvested stock options, restricted stock units, and restricted stock awards amounted to $8.3 million, $137.1 million, and $53.5 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 1.8 years, 1.9 years, and 1.3 years, respectively.

Stock Options:


	Number of Options (in thousands)	Weighted Average Price (in dollars)
Options outstanding at July 1, 2022	3,474	$	152
Options granted	—	$	—
Options exercised	(798)	$	139
Options forfeited/cancelled	(22)	$	173
Options outstanding at June 30, 2023	2,654	$	155
Options exercisable at June 30, 2023	1,546	$	141
Shares available for future grants, end of year	21,012
Shares reserved for issuance under stock option plans, end of year	23,666

Time-Based Restricted Stock and Time-Based Restricted Stock Units:


	Number of Shares (in thousands)	Number of Units (in thousands)
Restricted shares/units outstanding at July 1, 2022	1,021	173
Restricted shares/units granted	4	671
Restricted shares/units vested	(541)	(87)
Restricted shares/units forfeited	(34)	(27)
Restricted shares/units outstanding at June 30, 2023	450	730

Performance-Based Restricted Stock and Performance-Based Restricted Stock Units:


	Number of Shares (in thousands)	Number of Units (in thousands)
Restricted shares/units outstanding at July 1, 2022	222	757
Restricted shares/units granted	95	330
Restricted shares/units vested	(106)	(256)
Restricted shares/units forfeited	(14)	(10)
Restricted shares/units outstanding at June 30, 2023	197	821

The aggregate intrinsic value of outstanding stock options and exercisable stock options as of June 30, 2023 was $171.7 million and $121.3 million, respectively, which have a remaining life of 6 years and 5 years, respectively. The aggregate intrinsic value for stock options exercised in fiscal 2023, 2022, and 2021 was $80.6 million, $80.8 million, and $58.6 million, respectively.

The fair value for stock options granted was estimated at the date of grant using the following assumptions:


	2023	2022			2021
Risk-free interest rate	N/A	0		%	0.1		%
Dividend yield	N/A	1.8		%	2.6		%
Weighted average volatility factor	N/A	22.7		%	25.8		%
Weighted average expected life (in years)	N/A	4.9			5.4
Weighted average fair value (in dollars)	N/A	$	33.03		$	21.66

The weighted average fair values of shares granted were as follows:


Year ended June 30,	2023		2022		2021
(in dollars)
Performance-based restricted stock	$	245.96	$	206.86	$	138.53
Time-based restricted stock	$	214.75	$	208.08	$	141.52

The Company has a defined benefit cash balance pension plan. The U.S. pension plan, which is currently closed to new entrants, was frozen effective July 1, 2020. As of July 1, 2020 and onward, participants will retain their accrued benefits and will not accrue any future benefits due to pay and/or service. The plan interest credit rate varies from year-to-year based on the ten-year U.S. Treasury rate. The Company's policy is to make contributions within the range determined by generally accepted actuarial principles.

The Company also has various retirement plans for its non-U.S. employees and maintains a Supplemental Officers Retirement Plan (“SORP”). The SORP is a defined benefit plan pursuant to which the Company pays supplemental pension benefits to certain corporate officers upon retirement based upon the officers' years of service and compensation. The SORP, which is currently closed to new entrants, was frozen effective July 1, 2019, with no future accruals due to pay and/or service.

The Company is required to (a) recognize in its Consolidated Balance Sheets an asset for a plan's net overfunded status or a liability for a plan's net underfunded status, (b) measure a plan's assets and its obligations that determine its funded status as of the end of the employer's fiscal year, and (c) recognize changes in the funded status of a defined benefit plan in the year in which the changes occur in accumulated other comprehensive income (loss).

The Company's pension plans' funded status as of June 30, 2023 and 2022 is as follows:


June 30,	2023		2022

Change in plan assets:
Fair value of plan assets at beginning of year	$	1,800.5	$	2,306.3
Actual return on plan assets	126.6		(406.7)
Employer contributions	17.0		10.7
Currency translation adjustments	(3.0)		(16.4)
Benefits paid	(86.7)		(93.4)
Fair value of plan assets at end of year	$	1,854.4	$	1,800.5

Change in benefit obligation:
Benefit obligation at beginning of year	$	1,779.0	$	2,149.3
Service cost	4.8		5.7
Interest cost	78.2		52.3
Actuarial gain (a)	(48.2)		(319.2)
Currency translation adjustments	(2.0)		(22.5)
Plan changes	—		6.8

Acquisitions	0.7		—
Benefits paid	(86.7)		(93.4)
Projected benefit obligation at end of year	$	1,725.8	$	1,779.0

Funded status - plan assets less benefit obligations	$	128.6	$	21.5

The amounts recognized on the Consolidated Balance Sheets as of June 30, 2023 and 2022 consisted of:


June 30,	2023		2022

Noncurrent assets	$	247.7	$	148.5
Current liabilities	(5.6)		(5.3)
Noncurrent liabilities	(113.5)		(121.7)
Net amount recognized	$	128.6	$	21.5

The Company's pension plans with projected benefit obligations in excess of plan assets as of June 30, 2023 and 2022 had the following projected benefit obligation and fair value of plan assets:


June 30,	2023		2022

Projected benefit obligation	$	146.1	$	145.5

Fair value of plan assets	$	27.0	$	18.5

The Company's pension plans with accumulated benefit obligations in excess of plan assets as of June 30, 2023 and 2022 had the following accumulated benefit obligation and fair value of plan assets:


June 30,	2023		2022

Accumulated benefit obligation	$	117.0	$	132.0
Fair value of plan assets	$	8.3	$	18.5

The components of net pension (income)/ expense were as follows:


	2023		2022		2021
Service cost – benefits earned during the year	$	4.8	$	5.7	$	4.9
Interest cost on projected benefits	78.2		52.3		51.4
Expected return on plan assets	(127.5)		(127.9)		(121.3)
Net amortization and deferral	1.9		7.5		9.3
Special termination benefits, plan curtailments, and settlement charges	—		9.0		2.9
Net pension (income)/expense	$	(42.6)	$	(53.4)	$	(52.8)

The net actuarial loss and prior service cost for the defined benefit pension plans that are included in accumulated other comprehensive income (loss) that have not yet been recognized as components of net periodic benefit cost are $293.0 million and $5.5 million, respectively, at June 30, 2023. There is no remaining transition obligation for the defined benefit pension plans included in accumulated other comprehensive income (loss).

Assumptions used to determine the actuarial present value of benefit obligations were:


Years ended June 30,	2023		2022

Discount rate	5.10	%	4.60	%
Interest crediting rate	3.50	%	3.25	%
Increase in compensation levels	N/A		N/A

Assumptions used to determine the net pension expense generally were:


Years ended June 30,	2023		2022		2021

Discount rate	4.60	%	2.55	%	2.45	%
Interest crediting rate	3.25	%	3.25	%	3.25	%
Expected long-term rate of return on assets	6.75	%	6.75	%	6.75	%
Increase in compensation levels	N/A		N/A		4.00	%

The Company's pension plans' asset allocations at June 30, 2023 and 2022 by asset category were as follows:


	2023		2022

Cash and cash equivalents	—	%	2	%
Fixed income securities	39	%	39	%
U.S. equity securities	19	%	19	%
International equity securities	15	%	15	%
Global equity securities	27	%	25	%
	100	%	100	%

The Company's pension plans' asset investment strategy is designed to ensure prudent management of assets, consistent with long-term return objectives and the prompt fulfillment of all pension plan obligations. The investment strategy and asset mix were developed in coordination with an asset liability study conducted by external consultants to maximize the funded ratio with the least amount of volatility.

The pension plans' assets are currently invested in various asset classes with differing expected rates of return, correlations, and volatilities, including large capitalization and small capitalization U.S. equities, international equities, U.S. fixed income securities, and cash.

The target asset allocation ranges for the U.S. plan are generally as follows:


U.S. fixed income securities			35% - 45%
U.S. equity securities			14% - 24%
International equity securities			11% - 21%
Global equity securities			20% - 30%

The pension plans' fixed income portfolio is designed to match the duration and liquidity characteristics of the pension plans' liabilities. In addition, the pension plans invest only in investment-grade debt securities to ensure preservation of capital. The pension plans' equity portfolios are subject to diversification guidelines to reduce the impact of losses in single investments. Investment managers are prohibited from buying or selling commodities and from the short selling of securities.

None of the pension plans' assets are directly invested in the Company's stock, although the pension plans may hold a minimal amount of Company stock to the extent of the Company's participation in equity indices.

The pension plans' investments included in Level 1 are valued using closing prices for identical instruments that are traded on active exchanges. The pension plans' investments included in Level 2 are valued utilizing inputs obtained from an independent pricing service, which are reviewed by the Company for reasonableness. To determine the fair value of our Level 2 plan assets, a variety of inputs are utilized, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, new issue data, and monthly payment information. The pension plans have no Level 3 investments at June 30, 2023.

The following table presents the investments of the pension plans measured at fair value at June 30, 2023:


	Level 1		Level 2		Level 3		Total

Commingled trusts	$	—	$	829.5	$	—	$	829.5
Government securities	—		351.7		—		351.7
Mutual funds	18.2		279.0		—		297.2
Corporate and municipal bonds	—		355.1		—		355.1
Mortgage-backed security bonds	—		18.7		—		18.7
Total pension asset investments	$	18.2	$	1,834.0	$	—	$	1,852.2

The following table presents the investments of the pension plans measured at fair value at June 30, 2022:


	Level 1		Level 2		Level 3		Total

Commingled trusts	$	—	$	798.2	$	—	$	798.2
U.S. government securities	—		350.7		—		350.7
Mutual funds	11.0		252.6		—		263.6
Corporate and municipal bonds	—		322.4		—		322.4
Mortgage-backed security bonds	—		32.8		—		32.8
Total pension asset investments	$	11.0	$	1,756.7	$	—	$	1,767.7

The benefits expected to be paid in each year from fiscal 2024 to the year ended June 30, 2028 are $124.0 million, $140.4 million, $146.5 million, $126.7 million, and $125.1 million, respectively. The aggregate benefits expected to be paid in the five fiscal years from the year ended June 30, 2029 to the year ended June 30, 2033 are $661.3 million. The expected benefits to be paid are based on the same assumptions used to measure the Company's pension plans' benefit obligations at June 30, 2023 and includes estimated future employee service.

C. Retirement and Savings Plan. The Company has a 401(k) retirement and savings plan, which allows eligible employees to contribute up to 50% of their compensation annually and allows highly compensated employees to contribute up to 12% of their compensation annually. The Company matches a portion of employee contributions, which amounted to approximately $163.6 million, $153.1 million, and $130.8 million for the calendar years ended December 31, 2022, 2021, and 2020, respectively.