<SEC-DOCUMENT>0001193125-11-306206.txt : 20120106
<SEC-HEADER>0001193125-11-306206.hdr.sgml : 20120106
<ACCEPTANCE-DATETIME>20111110122037
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-11-306206
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20111110

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PAYCHEX INC
		CENTRAL INDEX KEY:			0000723531
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700]
		IRS NUMBER:				161124166
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0531

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		911 PANORAMA TRAIL S
		CITY:			ROCHESTER
		STATE:			NY
		ZIP:			14625-0397
		BUSINESS PHONE:		7163856666

	MAIL ADDRESS:	
		STREET 1:		911 PANORAMA TRAIL SOUTH
		CITY:			ROCHESTER
		STATE:			NY
		ZIP:			14625-0397
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<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<TITLE>Correspondence Letter</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">November&nbsp;10, 2011 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I><U>VIA FACSIMILE (703.813.6968)&nbsp;AND OVERNIGHT MAIL </U></I></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Securities and
Exchange Commission </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">100 F Street NE </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Washington, DC 20549 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attn: John Cash, Division
of Corporation Finance </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">RE:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Paychex, Inc.</FONT></TD></TR>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Form 10-K for the year ended May&nbsp;31, 2011</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Filed July&nbsp;15, 2011</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Definitive Proxy Statement on Schedule 14A</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Filed August&nbsp;31, 2011</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">File No.
0-11330</FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dear Mr.&nbsp;Cash: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Paychex, Inc. hereby responds to the comments of the Staff of the Securities and Exchange Commission (the &#147;Commission&#148;) in their letter dated October&nbsp;31, 2011, with respect to the
above-referenced filings. For the convenience of the Staff, the Staff&#146;s comments are set forth below in bold type, followed by our response. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We appreciate the comments made by the Commission, and will clarify or further enhance our disclosure in our future filings in response to these comments. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Form 10-K for the Fiscal Year Ended May&nbsp;31, 2011</U></B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><U>Definitive Proxy Statement on Schedule 14A</U></B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Director Compensation, page
9</U></B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Cash Compensation, page 9</U></B> </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>We note your disclosure that the annual retainer for directors increased from $25,000 to $70,000. With a view toward future disclosure, please tell us why the annual
retainer for directors nearly tripled during fiscal 2011. Refer to Item&nbsp;402(k)(3) of Regulation S-K.</B> </FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">For purposes of clarifying for the Staff, the change was an increase of $25,000, from $45,000 to $70,000. In July 2010, the Board
approved the increases to retainers when at the same time they had decreased the amount allocated to equity awards. The Board had received </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">John Cash, Division of Corporation Finance </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">11/10/2011 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"> Page
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 </FONT></P> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">competitive market data on director compensation of their peer group from their
independent consultants. Review of such information generated a change in compensation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In future filings, we will disclose
use of market data in director compensation decisions and will link the changes between the components of director&#146;s compensation. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Compensation Discussion and Analysis, page 22</U></B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><U>Annual Officer Performance Incentive Program, page 27</U></B> </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>In future filings, please ensure that you have fully described the basis for individual compensation awards and how pay correlated with the performance of your
business. For example, if incentive program payouts are first contingent upon the company meeting a goal for net income, you should disclose what the goal was. Where you have adjusted target performance measures from amounts you report in your
financial statements, please briefly explain the nature of material adjustments. Where you base compensation on qualitative goals, please discuss the nature of those goals.</B> </FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">While the Company has a net income goal to trigger the incentive program payouts, the goal, considered achievable at the time of setting,
was not the performance basis for payout of compensation. The higher targets forming the basis for payout are tied to the operation of our business and its financial results, as set forth in the table on page 27, and we believe provide more
meaningful information to the reader. In future filings, the net income goal will be disclosed. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Achievement against targets
was measured as per plan design. The plan requires certain adjustments when measuring achievement for the purpose of payout under the incentive program. Adjustments to fiscal 2011 reported financial results related to two immaterial acquisitions.
The adjustments were deemed immaterial for disclosure purposes within the Company&#146;s 2011 proxy statement. The Company&#146;s plan specifically provides for adjustments based upon acquisitions. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The qualitative goals are individual specific goals. The qualitative goals are not the sole factor in determining achievement, nor are
the individual-specific goals material in determining the amount of the qualitative component of the award. As such, the Company does not believe that disclosure of the individual-specific goals is warranted. Furthermore, disclosure of specific
individual goals could require the Company to reveal confidential, non-public information related to future business strategies, thereby putting the Company at a competitive disadvantage and potentially confusing readers who will not have the
benefit of full information related to those strategic matters. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">John Cash, Division of Corporation Finance </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">11/10/2011 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"> Page
 3
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Separation Agreements, page 30</U> </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Please tell us what consideration you gave to filing the separation agreements with your former CEO, Mr.&nbsp;Judge, and your former Senior Vice President of Sales
and Marketing, Mr.&nbsp;Humenik, as exhibits to your fiscal 2011 Form 10-K, or confirm that you will file these agreements with your next report.</B> </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Mr.&nbsp;Judge&#146;s Separation Agreement and Release dated July&nbsp;12, 2010 was filed as an exhibit to the Company&#146;s Form 10-Q filed on September&nbsp;27, 2010. Mr.&nbsp;Humenik&#146;s Separation
Agreement and Release dated October&nbsp;25, 2010 was filed as an exhibit to the Company&#146;s Form 10-Q filed on December&nbsp;20, 2010. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In accordance with Item&nbsp;601, instruction 2 to the Exhibit Table, previously filed documents may be incorporated by reference. It appears an oversight on our part in including such documents by
reference in Item&nbsp;15 of the 2011 Form 10-K, Exhibits table. We will incorporate by reference to the respective Form 10-Q filing the agreements in our 2012 Form 10-K, Exhibits table. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Paychex, Inc. hereby acknowledges that: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Paychex, Inc. is responsible for the adequacy and accuracy of the disclosure in its filings; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the
filing; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Paychex, Inc. may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under federal securities laws of
the United States. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">If you have any question, or require additional information, please do not hesitate to contact me.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Sincerely, </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Efrain Rivera
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Efrain Rivera </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Senior Vice
President, Chief Financial Officer and Treasurer </FONT></P>
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