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ADP Company History Timeline
In 1949, Henry Taub founded Automatic Payrolls, Inc. as a manual payroll processing business with his brother Joe Taub.
In 1951, Taub's younger brother Joe joined the organization, specializing in administrative functions for the next 25 years.
In 1952, Frank Lauterman was appointed CEO and Chairman of Automatic Payrolls, Inc.
He succeeded in gaining several accounts for the company, and in 1952, took a pay cut to become the company’s first full time salesman.
In 1953 the third member of Automatic Payrolls' longtime guiding trio came aboard.
By the June 1957 fiscal year, operating revenues had grown to $150,000; profits for the entire year, however, were a mere $964.
1957: Automatic Payrolls switches from manual bookkeeping machines to an IBM computer.
In 1957, the company changed its name to Automatic Data Processing, Inc. (ADP), and began using punched card machines, check printing machines, and mainframe computers.
In 1957, the company encountered modern technology when they invested in an IBM tab machine.
In 1957, Lautenberg, after successfully serving in sales and marketing, became a full-fledged partner with the two brothers.
In 1959 the Taubs set up a separate company, Automatic Tabulating Services, to handle the general data processing business.
In 1961, the company changed its name to Automatic Data Processing, Inc. (ADP), and began using punched card machines, check printing machines, and mainframe computers.
In 1962 ADP opened an office on Wall Street to provide brokerage firms with payroll and basic accounting services.
The acquisition drive got under way in 1965 when ADP broadened its brokerage business with the addition of Brokerage Processing Center and shortly thereafter expanded its payroll service with Payrolls for Industry of Long Island.
Then, in 1967, Miami Beach-based Computer Services of Florida was purchased.
In 1968 a sharp increase in Wall Street trading volume buried the brokerage firms’ back offices in paperwork, and trading hours at the exchange had to be curtailed.
Also in 1970, the company's stock transitioned from trading on American Stock Exchange to trading on the New York Stock Exchange.
In 1970, Lautenberg was noted as being the president of the company.
One of its most significant purchases during this period was of a main competitor in brokerage services, the RCA Systems Center, in 1971.
“Payroll Specialist” Investor’s Reader, July 26, 1972.
By 1972 it operated centers in 20 cities from which it paid more than one million people.
In 1972, ADP Dealer Services changed its name to CDK Global, which provides integrated technology solutions and services to over 26,000 auto-deals globally.
In 1973 sales reached $90 million and pretax earnings amounted to $16.7 million.
Dividends, while fairly conservative, were raised each year since payments started in 1974.
In 1974, ADP also bought TSL (Time Sharing Limited), an innovative online computer services company.
In 1974, they acquired Time Sharing Limited, which was a company that specialised in providing computer-related services, and a year later they acquired Cybernetics.
With the acquisition of the time-sharing giant Cyphernetics Corporation in 1975, however, ADP acquired telephone lines covering the United States, and satellite transmission to six European countries.
By 1978, it had acquired more than 60 companies, it had 50 service bureaus around the United States and 4 overseas, and its yearly return on shareholder’s equity was 30% higher than IBM, Digital Equipment Corporation, or Control Data Corporation.
With the acquisition of Itel Corp.’s Autadex division in 1980, ADP began developing another auto-related business line, now known as Automotive Claims Services.
More than 75 percent of the payroll clients also used ADP’s tax filing service (started in 1982) in which ADP handled the actual submission of tax payments to all levels of government.
Lautenberg remained the CEO until he resigned when he became a part of the US Senate in 1982.
In 1983 ADP bought GTE’s Telenet Information Services, which put it into stock quote machines, and three years later it acquired the Bunker Ramo quote machine operations.
Payroll and commercial services accounted for 55% of ADP’s total revenues in 1984.
By 1984, ADP dominated this market and was enjoying an annual growth rate of 30%.
The company in 1985 began wooing large customers in addition to the moderate-sized companies it had always considered its market.
In 1985 ADP added a Vehicle Valuation Service for cars that were stolen or “totaled.” It also started a parts service showing price and availability of private brand and salvage yard parts.
Also, he was a chairman till 1985, served as an honorary board member till his death.
From 1985 onward, ADP’s annual revenues exceeded the $1 billion mark, with paychecks processed for about 20% of the United States workforce.
Elected president in 1986, he ushered in a huge capital improvement program to bring its brokerage information services up to date, and, at the same time, leave its competition well behind.
In 1987, ADP reached agreements with Merrill Lynch and Shearson Lehman Hutton, to further develop and install its FS Partner systems.
The Wall Street fiasco of 1987, and subsequent layoffs and mergers in the business resulted in a 10% reduction in brokerage services revenues at ADP. Many saw ADP’s capital-intensive investment in the brokerage information services as risky but acknowledged that risk was the nature of the business.
In 1988, the company’s smaller ventures such as information services to auto dealers and insurance companies, interactive accounting services, and computer leasing services were flourishing.
Service,” Information Week, April 10, 1989.
An industry expert commented on ADP’s business acumen in the Wall Street Transcript, November 13, 1989, “We’ve seen a dramatic decrease in the revenue growth rate, coupled with continued gains in profitability.
ADP entered the proxy distribution business in 1989.
As part of ADP’s continual pruning of business ventures that fail to yield high returns or that do not fit its long-term strategic objectives, the company sold its automatic teller machine and its banking businesses in 1989.
In the 1990’s, ADP started expanding operations into other business sectors as well as expanding its reach.
By 1991 ADP was the top provider of such information services.
“Automatic Data Processing Hews to Winning Formula,” Wall Street Journal, December 24, 1992.
ADP remained confident, however, that the glitches would be overcome, and the company was set for a smooth 1994 season.
One of ADP’s first new offerings arose out of its merger with Checkfree Corp. in July 1995.
The company set the stage for this transition when it acquired a bank charter in 1995.
The company built upon this innovation when it formed its Electronic Banking Unit in 1997, which established partnerships with banks and software designers to create a centralized, web-based banking resource center.
In 1998, ADP reached an industrial landmark when it acquired Chessington Computer Centre, a British administrative services supplier to the UK Government.
In 2000 it launched ADP Enterprise Payroll Services, which offered a comprehensive web-based payroll and accounting platform for corporations with more than one location.
By the early 2000’s they were expanding aggressively, having acquired companies such as Kerridge Computer Co.
2006 2nd rank in the Information Week 500’s top-most 250 Innovators.
Ltd., a dealer management systems (DMS) provider to auto dealers, primarily in the UK, was acquired in 2006.
In 2007, the ADP Brokerage Service Group was spun off to form Broadridge Financial Solutions, Inc.
In 2010, ADP also went on to buy Cobalt, an up-coming auto marketing company.
2010 2nd rank in the Training Top 125 List by the Training magazine.
In 2010, they bought the auto-marketing enterprise Cobalt, to improve their footing in the field of automobile manufacturing.
He passed away in 2011, owing to complications which arose as a result of his leukaemia.
In January 2017, ADP acquired The Marcus Buckingham Company (TMBC).
Fast forward seven years to 2017, Automatic Data Processing Inc. was employing more than 56,000 people worldwide and generated revenues over $12 billion.
In January 2018, ADP acquired WorkMarket, a New York City-based software platform company that helps businesses manage freelancers, contractors, and consultants.
ADP currently has about 58,000 employees worldwide and its fiscal year 2019 revenues were $14.2 billion.
In 2020, ADP was ranked 227 on the Fortune 500 list of the largest United States corporations by revenue.
"Automatic Data Processing, Inc. ." International Directory of Company Histories. . Encyclopedia.com. (June 21, 2022). https://www.encyclopedia.com/books/politics-and-business-magazines/automatic-data-processing-inc-0
* From Fortune. ©2022 Fortune Media IP Limited All rights reserved.
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