2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 472 CD&A Peer Group. Peer Group benchmarking is not the sole determining factor in the G&C Committee’s decisions on compensation, and the G&C Committee reserves the discretion to adjust compensation based on other factors as previously discussed. The Peer Group companies are not necessarily limited to the markets in which Paychex does business. The Peer Group is comprised of the following industries or segments: a direct competitor in the HCM industry, financial transaction management companies, and business services and outsourcing companies. Our current Peer Group consists of the following companies: Peer Group Alliance Data Systems Corporation Intuit Inc. Automatic Data Processing, Inc. Moody’s Corporation Broadridge Financial Solutions, Inc. Robert Half International Inc. DST Systems, Inc. TD AMERITRADE Holding Corporation Equifax, Inc. The Dun & Bradstreet Corporation Fiserv, Inc. The Western Union Company Global Payments Inc. Total System Services, Inc. H&R Block, Inc. Paychex Paychex, Inc. vs. Peer Group Peer Median $- $500 $1,000 $1,500 $4,000 $4,500 Revenue (1) ($millions) $- $200 $400 $1,200 $1,400 Operating Income (1) ($millions) 0.0% 5.0% 10.0% 15.0% 40.0% 45.0% Operating Income Margin (1) $2,000 $2,500 $3,000 $3,500 $600 $800 $1,000 20.0% 25.0% 30.0% 35.0% (1) Based on the most recent completed fiscal year for each company in the Peer Group. The G&C Committee annually reviews and approves the selection of Peer Group companies, adjusting the group from year to year based upon our business and changes in the Peer Group companies’ business or the comparability of their metrics. The Peer Group may also be adjusted in the event of mergers, acquisitions, or other significant economic changes. The Peer Group was adjusted for fiscal 2017. The Brink’s Company and Iron Mountain Incorporated were removed from the Peer Group for fiscal 2017 and were replaced with Alliance Data Systems Corporation and Equifax, Inc., as they are more closely aligned with the Paychex business. Paychex, Inc. 2017 Proxy Statement • 40 PAYCHEX, INC.