Paychex holds exec compensation steady

Bursts of laughter at times filled the auditorium during Paychex's annual shareholders meeting on Wednesday. For Harry Caruso, attending his first meeting despite having been a shareholder for more than a decade, the meeting at The Strong National Museum of Play was a far cry from the at-times tense sessions he has attended with other local companies.

"This was by far, probably, the most friendly meeting I've been to," the 71-year-old Rochester man said after shareholders OK'd a handful of measures including the advisory "say-on-pay" vote regarding executive compensation.

Paychex reached the billion dollar mark in operating income for the first time in the fiscal year that ended May 31, and returned $552 million, or 82 percent of net income, to shareholders. Before the meeting, the Penfield-based payroll and human resource services firm declared a regular quarterly dividend of $0.42 per share.

Yet, at a time when CEO pay is steadily rising among S&P 500 companies, Paychex held President and CEO Martin Mucci and other top executives' total compensation steady in the latest fiscal year, which ended May 31.

His salary — not counting stock or cash bonuses — was $893,231, up from $845,000 in fiscal 2014. Chief Financial Officer Efrain Rivera's $468,846 base salary was nearly $44,000 more than last year, while Senior Vice President of Sales Mark A. Bottini's $446,923 was up $22,000.

Mucci received stock and options with an estimated value of $3.7 million, down from $3.9 million last year. Add in the annual Officer Performance Incentive Program cash bonuses and matching 401(k) contributions and the CEO's compensation totaled $5.9 million, down 1.6 percent from just more than $6 million a year ago. Others saw a slight uptick.

Median compensation for CEOs of S&P 500 companies grew 10.6 percent year-over-year for calendar year 2014; the $3.9 million figure representing a 20 percent increase since 2010. Much of the explanation for the variation at Paychex lies in how the company's board handles compensation, looking at performance over a multi-year period then awarding longer-term incentive pay on that cycle, a company spokeswoman said, noting that the company is nearing the end of one of those cycles.

"We are the stewards of a great, 45-year legacy," Mucci told shareholders. "We have a strong past, and great momentum. I hope you can feel that."

BDSHARP@DemocratandChronicle.com