NOTICE OF 2018 ANNUAL MEETING OF STOCKHOLDERS

November 13, 2018	8:00 a.m. central time	www.virtualshareholdermeeting.com/ CDK2018

Notice is hereby given that the 2018 Annual Meeting of Stockholders of CDK Global, Inc. (the “Company,” “CDK Global,” “us,” “our” or “we”), will be held on November 13, 2018 at 8:00 a.m. central time at www.virtualshareholdermeeting.com/ CDK2018 (the “Annual Meeting”). This Annual Meeting will be a completely virtual, live, audio webcast meeting of stockholders.

The items of business are:

All stockholders of record of our common stock at the close of business on September 14, 2018, the record date, are entitled to notice of and to vote at the Annual Meeting and any adjournments thereof.

October 2, 2018
Hoffman Estates, Illinois

Lee J. Brunz
Executive Vice President, General Counsel and Secretary

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIAL FOR THE ANNUAL MEETING

SEC rules permit companies to furnish proxy materials to their stockholders over the internet. This expedites stockholders’ receipt of proxy materials, lowers annual meeting costs and conserves natural resources. We are therefore mailing stockholders a Notice of Internet Availability of Proxy Materials, rather than a paper copy of the proxy statement and our Annual Report on Form 10-K. The Notice of Internet Availability of Proxy Materials contains instructions on how to access our proxy materials online, vote and (if desired) obtain a paper copy of our proxy materials.

YOUR VOTE IS IMPORTANT

Your vote is important, and we urge you to vote as promptly as possible by using the internet, by telephone, or by signing, dating and returning the Proxy Card mailed to you if you received a paper copy of this proxy statement.

TABLE OF CONTENTS

PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information you should consider, and you should read the entire proxy statement carefully before voting. For more complete information regarding the Company’s performance for the fiscal year ended June 30, 2018 (“fiscal 2018”), please review the Company’s Annual Report on Form 10-K for fiscal 2018.

VOTING MATTERS

Stockholders are being asked to vote on the following matters at the Annual Meeting:

You may cast your vote in any of the following ways:

Internet	Phone	Mail
Visit www.ProxyVote.com. You will need the 16-digit number included in your proxy card, voter instruction form or notice.	Call 1-800-690-6903 or the number on your voter instruction form. You will need the 16-digit number included in your proxy card, voter instruction form or notice.	Send your completed and signed proxy card or voter instruction form to the address on your proxy card or voter instruction form.

CORPORATE GOVERNANCE BEST PRACTICES

The CDK Global Board of Directors (the “Board”) is committed to sound corporate governance policies that we believe promote the long-term interests of the business and of our stockholders. This proxy statement sets forth a detailed description of our governance framework, which includes the following highlights:

DIRECTOR NOMINEES

The Board and the nominating and governance committee believe that the following director nominees possess the necessary qualifications to provide effective oversight of the business and quality advice and counsel to our management to ensure accountability to our stockholders:

The Board and the nominating and governance committee have selected director nominees with a mix of skills, qualifications and attributes that strike the right balance between long-term understanding of our business and fresh external perspectives, as well as to ensure diversity within the boardroom.

FISCAL 2018 PERFORMANCE HIGHLIGHTS

We encourage you to read the following Performance Highlights as background to this proxy statement.

Fiscal 2018 was a pivotal year for CDK Global. We exceeded our three-year business transformation plan adjusted EBITDA growth and margin expansion targets originally set at the end of our fiscal year ended June 30, 2015 (“fiscal 2015”) and met our commitment to return $750 million to $1 billion of capital to our stockholders during calendar year 2017. At the same time we grew diluted net earnings per share by 40% on a GAAP basis, and 27% on a non-GAAP adjusted basis. We also executed on our leadership succession plan and transitioned to a new CFO and a new President of our largest segment, Retail Sales North America.

We accomplished all of this while also implementing strategic actions to re-energize our transformed business for future growth. We enhanced our product portfolio through strategic acquisitions, including Dealer Dashboard Enterprises, a leader in reporting solutions for auto dealers, and Progressus Media, a specialty provider of mobile advertising solutions for dealerships, agencies, and automotive marketing companies. In addition, we announced innovative product initiatives, including Drive Flex DMSaaS, a cloud-based DMS product focused on smaller dealerships, and Fortellis Automotive Commerce Exchange, a technology platform focused on allowing developers, OEMs and dealers to leverage, build, innovate, and securely integrate solutions and workflows to transform their businesses.

In spite of these accomplishments, we were disappointed with our revenue growth for fiscal 2018. We entered our fiscal year ending June 30, 2019 (“fiscal 2019”) focused on growing our revenue, while also continuing the business transformation plan in support of our adjusted EBITDA and capital return targets.

FISCAL 2018 OPERATING RESULTS⁽¹⁾

¹ Financial results, including the GAAP to non-GAAP reconciliations, are reflected as reported in the Company's Annual Report on Form 10-K for fiscal 2018.

BUSINESS TRANSFORMATION PLAN RESULTS⁽¹⁾

¹ Financial results, including the GAAP to non-GAAP reconciliations, are reflected as reported in the Company's Annual Report on Form 10-K for fiscal 2018.

RETURN TO STOCKHOLDERS

Return of Capital

In January 2017, the Board authorized us to repurchase up to $2.0 billion of our common stock as part of a return of capital plan through which we expect to return approximately $750.0 million to $1.0 billion per calendar year through calendar 2019 via a combination of dividends and share repurchases. Consistent with that goal, during calendar year 2017, we returned $755.0 million of capital to stockholders.

Total Stockholder Return

We have delivered significant long-term total stockholder return (“TSR”) as evidenced by the chart below, which shows how a $100 investment in CDK Global on October 1, 2014 (the date of our spin-off from ADP) would have grown to $216 on June 30, 2018, assuming all cash dividends were reinvested. The chart also compares the TSR on an investment in our common stock to the same investment in the: (i) Standard & Poor's (S&P) 500 Index, (ii) S&P MidCap 400 Index, and (iii) S&P 400 Information Technology Index over the same period.

The comparisons in the graph above are based upon historical data and are not indicative of, or intended to forecast, future performance of our common stock. The graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 (“Securities Act”) or the Securities Exchange Act of 1934 (the “Exchange Act”), each as amended, except to the extent that we specifically incorporate it by reference into such filing.

FISCAL 2018 COMPENSATION HIGHLIGHTS

Cash Compensation

Base Salary

We provide competitive fixed, non-variable compensation for the expertise and knowledge that each executive brings to his or her role, thereby mitigating pressure to support high-risk business strategies.

Annual Incentive Cash Bonus

We provide an annual incentive cash bonus to align each senior executive's interests with our stockholders’ interests, and to reinforce key strategic initiatives and encourage superior individual performance. Annual incentive cash bonus payments are made to executive officers under the Company's 2014 Omnibus Award Plan (the “2014 Plan”), which was approved by stockholders at our 2015 Annual Meeting. For fiscal 2018, bonus achievement was based on the following performance measure targets and weights: (i) fiscal 2018 adjusted EBITDA margin of 35.5% (25%); (ii) fiscal 2018 adjusted EBITDA of $813 million (20%); (iii) fiscal 2018 global revenue growth of 4% (20%); (iv) fiscal 2018 global sales of $328 million (15%); and (v) individual strategic objectives (“MBOs”) (20%).

While the Company exceeded its three-year business transformation plan adjusted EBITDA margin target, actual overall achievement against the fiscal 2018 bonus plan objectives was mixed. The Company achieved its adjusted EBITDA margin and global sales targets, but did not meet the adjusted EBITDA or global revenue growth targets. This resulted in a 70.9% calculated payout versus the 80% target payout for all non-MBO financial measures. The compensation committee then applied negative discretion to yield an overall achievement of 60% on all non-MBO financial targets. The calculation of our fiscal 2018 annual incentive cash bonus payout is described in more detail below under “Compensation Review and Determination - Cash Compensation - Annual Incentive Cash Bonus.”

Long Term Equity Incentive Compensation

Performance Stock Units and Stock Options

The Company's fiscal 2018 long-term equity incentive compensation for its executives consisted of grants of performance stock units (“PSUs”) for 70% of total award value, which cliff vest at the end of a three-year performance period based on actual achievement of performance goals set at the time of the grant, and stock options for the remaining 30% of total award value, which have pro rata annual vesting over four years. For our fiscal year ended June 30, 2017 (“fiscal 2017”), the compensation committee approved grants of both fiscal 2017 and fiscal 2018 PSUs and stock options for all executives, including the Chief Executive Officer. The fiscal 2018 PSUs and stock options granted in fiscal 2017 are referred to as “pull forward” awards.

At the time of the grant, the “pull forward” PSU and stock option vesting schedules were set by the compensation committee as if the awards were made in fiscal 2018. As an additional condition to the grant, the compensation committee determined that recipients of fiscal 2018 “pull forward” awards would forgo receipt of any additional regular annual long-term equity incentive awards in fiscal 2018.

The compensation committee maintained its commitment to forgo additional regular annual awards in fiscal 2018. Accordingly, the only equity awards granted in fiscal 2018 were to Mr. Tautges in connection with his first year of service with the Company, and special one-time grants of: (i) restricted stock awarded to Mr. Brunz in recognition for his services as interim chief financial officer during fiscal 2017 and fiscal 2018, and interim chief human resources officer during fiscal 2017; and (ii) restricted stock and fiscal 2018 PSUs awarded to Mr. Flynn to encourage retention in recognition of his criticality to the success of the business transformation plan.

Settlement of Fiscal 2016 Performance Stock Units

Our executives, including the Named Executive Officers, with the exception of Mr. Tautges, Ms. Byrne, and Mr. Crutchfield, were awarded PSUs in fiscal 2016 (“fiscal 2016 PSUs”) which had a three-year performance period that ran from July 1, 2015, to June 30, 2018. Performance goals for the period were set by the compensation committee in September 2015. The primary performance goal was aligned with our three-year business transformation plan adjusted EBITDA margin goal of 35% for full-year fiscal 2018, such that achievement of the

business transformation plan goal would result in a maximum number of PSUs earned at 200% of target. The number of PSUs earned was subject to further adjustment depending on the TSR of our common stock during the performance period compared against a performance peer group of companies in similar Global Industry Classification Standard (“GICS”) codes, as well as digital advertising and marketing companies. Lastly, if our compounded annual revenue growth over the performance period cycle was below 3%, awards would be capped at 100% of target.

The fiscal 2016 PSUs were settled at 162.5% of target. This is based on achievement at 200% of target for our fiscal 2018 adjusted EBITDA margin of 35.9%, multiplied by 81.25% for our three-year TSR ranking at the 31^st percentile in the performance peer group. Finally, the payout was not subject to the cap because our compounded annual revenue growth of 3.7% exceeded the 3% floor. Our PSU awards are described in more detail below under “Compensation Review and Determination - Long-Term Equity Incentive Compensation - Performance-Based Stock Units.”

Total Direct Compensation

Set forth below is the fiscal 2018 direct compensation for each Named Executive Officer as determined under SEC rules. The amounts reported in this table differ substantially from the amounts reported in the Summary Compensation Table calculated based on SEC rules. This table supplements, but is not a substitute for the Summary Compensation Table. See the Summary Compensation Table and the accompanying notes to the table beginning on page 52 for more information.

PROPOSAL 1: ELECTION OF DIRECTORS

Upon the recommendation of the nominating and governance committee, the Board has nominated nine directors for election at the Annual Meeting. Each nominee is currently serving as one of our directors. If you re-elect them, they will hold office until our next annual meeting of stockholders or until their successors have been elected and qualified. If any of the nominees should for any reason be unable or unwilling to serve as of the Annual Meeting, the Board may designate a substitute nominee or reduce the size of the Board. If the Board designates a substitute nominee, the proxies will be voted for the election of such other person.

The nominating and governance committee and the Board look for current and potential directors collectively to have a mix of skills, experiences, qualifications, and character attributes that align with the needs of our long-term business strategy and that help achieve the goal of having a well-rounded, diverse Board that functions effectively as a unit. Recognizing that the selection of qualified directors is complex and crucial to our long-term success, the Board and the nominating and governance committee have established the Board composition and refreshment processes as described beginning on page 19 of this proxy statement.

All of our nominees are seasoned leaders, the majority of whom are or were chief executive officers or other senior executives and who bring to the Board skills, experience, and qualifications gained during their tenure at a wide array of public companies, private companies, non-profits, and other organizations. The following graphics summarize the notable skills, experience, and qualifications of each director nominee and highlight the balanced mix of skills, experience, and qualifications of the Board as a whole. This high-level summary is not intended to be an exhaustive list of each director nominee’s qualifications or contributions to the Board. On the following pages we have indicated for each nominee certain of the specific skills, experience, and qualifications that led the nominating and governance committee and the Board to conclude that the nominee should continue to serve as a director.

MAJORITY VOTING STANDARD

Our by-laws provide that directors are elected by a majority of votes cast unless the number of nominees exceeds the number of directors to be elected, in which case directors are elected by a plurality of votes cast. A majority of votes cast means that the number of shares voted “for” a director exceeds the number of votes cast “against” the director; abstentions are not counted either “for” or “against.” If an incumbent director in an uncontested election fails to receive a majority of votes cast for his or her election, the director is required to offer to tender his or her resignation to the Board for consideration by the nominating and governance committee. The nominating and governance committee will make a recommendation to the Board as to whether to accept or reject the resignation or to take other action. The Board is required to review and act on this recommendation within 90 days of the date of the certification of election results.

DIRECTOR NOMINEES

	Leslie A. Brun	Chairman and Chief Executive Officer of SARR Group, LLC
	Age 66	Independent Chairman of the Board
	Director Since	September 2014
	Board Committees	None
		Other Public Boards

	Broadridge Financial Solutions (Chair) Corning Merck & Co.     Director Qualification Highlights CEO Experience Capital Markets Investor Relations Enterprise Risk Management
BIOGRAPHY
Mr. Brun has been the Chairman and Chief Executive Officer of SARR Group, LLC, an investment holding company, since 2006. In addition, he was formerly Managing Director and head of investor relations at CCMP Capital Advisors, LLC, a global private equity firm. He is also the founder and Chairman Emeritus of Hamilton Lane Advisors, a provider of asset management services for which he served as Chief Executive Officer and Chairman from 1991 until 2005. From 1988 to 1991, he was Managing Director and co-founder of the investment banking group of Fidelity Bank in Philadelphia. Mr. Brun has served as a director of Broadridge Financial Solutions, Inc. (“Broadridge”), an investor communications and business process outsourcing provider, since 2007 and as Broadridge’s Chairman of the Board since 2011. He has served as a director of Merck & Co., Inc. (“Merck”), a health care company, since 2009 and lead director since 2016, and as a director of Corning, Inc., a materials and technology company, since July 2018. He served as a director of Hewlett Packard Enterprise Company, a technology solutions provider, from 2015 to 2018, and as a director of Automatic Data Processing, Inc. (“ADP”) from 2003 to 2015 and as ADP’s Chairman of the Board from 2007 to 2015. Mr. Brun’s investment banking and leadership experience provide him with extensive financial and management expertise, and his directorships at other public companies have given him broad experience with governance and other issues facing public companies.

BOARD COMPOSITION AND REFRESHMENT

DIRECTOR SELECTION AND BOARD MEMBERSHIP CRITERIA

Recognizing that the selection of qualified directors is complex and crucial to our long-term success, the nominating and governance committee has established director qualification criteria for membership on the Board. When considering current directors for re-nomination to the Board, the nominating and governance committee assesses changes to any director’s qualifications, including their independence, and takes into account the performance of each director, which is part of the committee’s annual Board evaluation process. The nominating and governance committee then recommends actions for the Board to consider and adopt as it sees fit.

The nominating and governance committee has not established specific minimum age, education, experience, or skill requirements for potential members. Instead, the nominating and governance committee reviews the composition of the Board in light of the Company’s current challenges and needs and the current challenges and needs of the Board. Based on this review, the Board then determines whether it may be appropriate to add or remove individuals after considering, among other things, the need for audit committee expertise and issues of independence, diversity, judgment, character, reputation, age, skills, education, training, background, and experience. All potential candidates should also possess the following personal characteristics: (i) business community respect for his or her integrity, ethics, principles, insights, and analytical ability; and (ii) ability and initiative to frame insightful questions, speak out, and challenge questionable assumptions and disagree without being disagreeable. The nominating and governance committee values diversity as a factor in selecting nominees to serve on the Board and considers the criteria noted above in selecting nominees for directors, including members from diverse backgrounds who combine a broad spectrum of experience and expertise. The nominating and governance committee believes that the Board, as currently constituted, is well-balanced and that it fully and effectively addresses our needs.

Nominations of candidates for the Board by our stockholders for consideration at our 2019 Annual Meeting of Stockholders are subject to the deadlines and other requirements described on page 69 of this proxy statement.

BOARD AND COMMITTEE SELF-ASSESSMENTS

The nominating and governance committee oversees an annual self-assessment process, whereby each director is surveyed to obtain his or her evaluation of the Board as a whole and the committees on which he or she serves. The surveys solicit ideas from the directors about, among other things, improving quality of Board and committee discussions on key matters, and identifying specific issues which should be discussed in the future. After these evaluations are complete, our general counsel summarizes the results, provides a preview for the Chairman of the Board and the Chair of each committee and then submits the summaries for discussion by the nominating and governance committee. If necessary, action plans are developed by the nominating and governance committee and recommended for discussion by the full Board.

In addition, as part of the annual self-assessment process, the nominating and governance committee facilitates structural sessions in which directors are encouraged to provide feedback on the performance of their peers. The Chairman of the Board and/or the Chair of the nominating and governance committee communicate relevant feedback to each director and take further action as they deem appropriate.

DIRECTOR ORIENTATION AND CONTINUING EDUCATION

The nominating and governance committee oversees our orientation programs for new directors and continuing education programs for directors.

Each new director, after joining the Board, is provided with orientation regarding the Board and the Company’s operations. As part of this orientation, each new director has an opportunity to meet with members of our senior management team.

Directors are also provided with continuing education on various subjects that will assist them in discharging their duties. Such continuing education may include presentations by our management, the Board’s outside advisors or

other third party experts on our business, information security and system disruption, compliance efforts, applicable legal, regulatory or other developments or other matters as the Board, or the nominating and governance committee in its oversight of the Board’s continuing education program, may deem appropriate.

BOARD AND COMMITTEE GOVERNANCE

We have robust policies and procedures for our directors and management and our commitment to good corporate governance is integral to our business. Our key governance practices are described below.

THE BOARD'S ROLE IN STRATEGY OVERSIGHT

A key component of the Board's role is to provide guidance on and oversight of the Company's strategy. In connection with these responsibilities, the Board has an obligation to keep informed about the Company’s business and strategies. This involvement enables the Board to provide guidance to management in formulating and developing plans and to exercise independently the Board’s decision-making authority on matters of importance to the Company. Acting as a full Board and through the Board’s three standing committees the Board is directly involved in the Company’s strategic planning process.

Each year senior management convenes to review and refine the Company’s overall corporate strategy. Strategic areas of importance and specific operating priorities are identified, which, in turn inform the Company’s long-range planning. Some of the priorities will be short-term in focus; others will be based on longer time horizons. Senior management then reviews the conclusions reached with the Board at one or more meetings. These meetings involve both management presentations and input from the Board regarding the assumptions, priorities and strategies that form the basis for management’s operating plans.

At subsequent Board meetings, the Board continues to review the Company’s progress against its strategic plans and to exercise oversight and decision-making authority regarding strategic areas of importance and associated authorizations. For example, in the summer, the Board typically reviews the Company’s overall annual performance and considers the operating budget and capital plan for the coming fiscal year. In this time period, the Board also usually finalizes specific criteria against which the Company’s performance will be evaluated. In addition, Board meetings held throughout the year target areas of the business for extended, focused Board input and discussion. These time frames are flexible, however, and the Board adjusts its meeting agendas and plans to reflect business priorities and developments.

The oversight and input provided is integral to the development and review of the Company’s strategic plan. Through this rigorous and interactive process, the Board encourages the long-term success of the Company by exercising sound and independent business judgment on the strategic issues that are important to the Company’s business.

THE BOARD’S ROLE IN RISK OVERSIGHT

The Board provides oversight with respect to our enterprise risk assessment and risk management activities that are designed to identify, prioritize, assess, monitor, and mitigate the various risks we confront, including risks that are related to the execution of our business transformation plan, the achievement of other elements of our operational and financial strategy, and information security and system disruption. The Board performs this oversight function periodically as part of its meetings and also through its three committees, each of which examines various components of enterprise risk as part of its assigned responsibilities. The committees report on risk oversight matters directly to the Board on a regular basis. Management is responsible for establishing and supervising day-to-day risk management processes and reporting to the Board and its committees as necessary.

The compensation committee oversees risks related to compensation matters. The nominating and governance committee oversees risks associated with Board structure and other governance policies and practices. The audit committee focuses on financial risks, including reviewing with management, our internal auditors, and our Independent Auditor our major financial risk exposures, the adequacy and effectiveness of internal control over financial reporting, and the steps management has taken to monitor and control financial risk exposures. In

addition, the audit committee reviews risks related to our financial reporting, and compliance with other applicable laws, regulations, and ethical standards. The audit committee regularly receives, reviews, and discusses with management presentations and analyses on various risks we confront.

BOARD LEADERSHIP STRUCTURE

Our corporate governance principles do not require the separation of the roles of Chairman of the Board and Chief Executive Officer because the Board believes that effective board leadership can depend on the skills and experience of, and personal interaction between, people in leadership roles. The Board is currently led by Mr. Brun, our independent non-executive Chairman of the Board. Mr. MacDonald, our President and Chief Executive Officer, serves as a member of the Board. The Board believes this leadership structure is in the best interests of our stockholders at this time. Separating these positions allows our Chief Executive Officer to focus on developing and implementing our business plans and supervising our day-to-day business operations, and allows our Chairman of the Board to lead the Board in its oversight, advisory, and risk management roles.

BOARD INDEPENDENCE

The Board is currently composed of eight non-employee directors and one employee director. The Board has established that nine directors will be the number that will constitute the full Board at the time of the Annual Meeting. Under our Corporate Governance Guidelines and the NASDAQ Stock Market (“NASDAQ”) listing standards, at least a majority of our Board must be independent. The Board’s standards of director independence are consistent with the NASDAQ listing standards. Directors meeting these standards are considered to be “independent.” The Board has affirmatively determined that all directors other than Mr. MacDonald meet these standards and are, therefore, considered to be independent directors. Mr. MacDonald does not meet these standards and is, therefore, not considered to be an independent director. Based on the these standards, all current members of the audit, compensation, and nominating and governance committees are independent.

CORPORATE GOVERNANCE GUIDELINES AND COMMITTEE CHARTERS

The Board has adopted Corporate Governance Guidelines. These guidelines address items such as the standards, qualifications, and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. The guidelines are subject to periodic review by the Board and to modification from time to time by the Board. The guidelines together with the charters of each of the Board’s audit, compensation, and nominating and governance committees are available under “Corporate Governance” in the “Investor Relations” section of our website at cdkglobal.com.

BOARD COMMITTEES

The Board has three standing committees: audit, compensation, and nominating and governance. The table below indicates the members of each Board committee. Mr. Tarkoff served as a member of the nominating and governance committee during fiscal 2018. Effective with Mr. Tarkoff's September 2018 resignation from the Board, Mr. Sowinski was appointed as a member of the nominating and governance committee.

	Audit	Compensation	Nominating and Governance
Leslie A. Brun (Chairman)
Willie A. Deese
Amy J. Hillman
Brian P. MacDonald
Eileen J. Martinson
Stephen A. Miles
Robert E. Radway	E

	Audit	Compensation	Nominating and Governance
Stephen F. Schuckenbrock
Frank S. Sowinski	E

= Committee Chair

E = Financial Expert

COMPENSATION ADVISOR

The compensation committee has engaged Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent external advisor. The compensation committee reviewed its relationship with FW Cook, considered FW Cook’s independence and the existence of potential conflicts of interest, and determined that the work of FW Cook did not raise any conflicts of interest in fiscal 2018. In making this assessment, the compensation committee considered various factors, including the independence factors enumerated in the compensation committee's charter, Rule 10C-1(b) under the Exchange Act, and applicable NASDAQ listing standards.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Willie Deese, Eileen Martinson, and Robert Radway served on the compensation committee for all of fiscal 2018. No member of the compensation committee is now, or was during fiscal 2018, an officer or employee of ours, and none of our executive officers serves, or served during fiscal 2018, as a director or member of a compensation committee of any entity that has one or more executive officers serving as a member of the Board or compensation committee. No member of the compensation committee had any relationship with us or any of our subsidiaries during fiscal 2018 pursuant to which disclosure would be required under our Related Persons Transactions Policy or applicable SEC rules pertaining to the disclosure of transactions with related persons.

BOARD AND COMMITTEE MEETING ATTENDANCE

During fiscal 2018, the Board held 16 meetings, the audit committee held 10 meetings, the compensation committee held five meetings, and the nominating and governance committees held four meetings. Overall attendance at such meetings was approximately 92%. All of our directors attended at least 75%, in the aggregate, of the meetings of the Board and the committees of which they were members during the periods that they served on the Board during fiscal 2018. It is also our policy that our directors attend the Annual Meeting. Last year all directors attended the 2017 Annual Meeting.

EXECUTIVE SESSIONS

Executive sessions of the non-management directors are held during each Board meeting and the majority of committee meetings. Mr. Brun, our independent non-executive Chairman of the Board, presides at each executive session of the Board.

OUTSIDE ADVISORS

The Board and each of its principal committees may retain independent legal, financial, or other advisors of their choosing at our expense. The Board need not obtain management’s consent to retain outside advisors. In addition, the three principal committees need not obtain either the Board’s or management’s consent to retain outside advisors.

STOCKHOLDER COMMUNICATIONS

Engagement and transparency with our stockholders provide us with useful feedback on a wide variety of topics, including governance, compensation, stockholder communication, Board composition, stockholder proposals, business performance, and operations. This information is shared regularly with our management and the Board and considered in the processes that set the governance practices and our strategic direction. We also use stockholder feedback to better tailor the public information we provide to address the interests and inquiries of our stockholders.

We interact and communicate with our stockholders through a number of forums, including quarterly earnings presentations, SEC filings, annual meetings, investor conferences, and web communications.

In addition, the Board has endorsed the Shareholder-Director Exchange (“SDX”) Protocol as a guide for effective, mutually beneficial engagement between our stockholders and directors. The Board believes that management should speak for the Company and that the Chairman of the Board should speak for the Board. During fiscal 2018, the Chairman of the Board met with stockholders to discuss a variety of topics, including our strategy and performance.

In order to provide our stockholders and other interested parties with a direct and open line of communication to the Board, we have adopted the following procedures for communications to directors. Stockholders and other interested persons may communicate with the Board by written communications addressed in care of Lee J. Brunz, our Secretary, at CDK Global, Inc., 1950 Hassell Road, Hoffman Estates, IL 60169.

All communications received in accordance with these procedures will be reviewed initially by our Secretary who will relay all such communications to the appropriate director or directors unless it is determined that the communication: (i) does not relate to our business or affairs or the functioning or constitution of the Board or any of its committees; (ii) relates to routine or insignificant matters that do not warrant the attention of the Board; (iii) is an advertisement or other commercial solicitation or communication; (iv) is frivolous or offensive; or (v) is otherwise not appropriate for delivery to directors.

The director or directors who receive any such communication will have discretion to determine whether the subject matter of the communication should be brought to the attention of the full Board or one or more of its committees and whether any response to the person sending the communication is appropriate. Any such response will be made only in accordance with applicable laws and regulations relating to the disclosure of information.

The Secretary will retain copies of all communications received pursuant to these procedures for a period of at least one year. The Board will review the effectiveness of these procedures from time to time and, if appropriate, recommend changes.

In addition, anyone who has a concern about the Company's conduct or about the Company's accounting, internal accounting controls or auditing matters may communicate those concerns directly to the audit committee. Such communications may be confidential or anonymous and may be submitted electronically, by phone or in writing to:

CODE OF BUSINESS CONDUCT AND ETHICS

We have adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to our executive officers, directors, and employees, including our principal executive officer, principal financial officer, principal accounting officer, controller, and persons performing similar functions. The Code of Ethics may be viewed on our website at www.cdkglobal.com under “Corporate Governance” in the “Investor Relations” section. In the event we

amend or waive any of the provisions of the Code of Ethics applicable to any of our directors, our principal executive officer, principal financial officer, principal accounting officer, controller, and persons performing similar functions that relates to any element of the definition of “code of ethics” enumerated in Item 406(b) of Regulation S-K under the Exchange Act, we intend to disclose these actions on our website within four business days following the date of the amendment or waiver. No such waivers were made during fiscal 2018.

Our credibility and reputation depend upon the good judgment, ethical standards, and personal integrity of each director, executive officer, and employee and we expect them to conduct themselves with the highest degree of integrity, ethics, and honesty. In order to better protect us and our stockholders, we regularly review our Code of Ethics and related policies to ensure that they provide clear guidance to our directors, executive officers, and employees.

CORPORATE HOTLINE

We have established an independent CDK Global Ethics Hotline, utilizing a global internet and telephone information and reporting service, to allow any employee, director, or vendor to confidentially and anonymously: (i) ask questions about our Code of Ethics and other ethics and compliance issues; and (ii) submit a report or complaint about any potential accounting, internal control, auditing, Code of Ethics, or other violation or matter of concern (unless prohibited by local privacy laws in the jurisdiction of the reporting employee, in which case an alternate inquiry and reporting system has been implemented).

CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS

We have adopted a written Related Persons Transactions Policy (the “policy”), which sets forth our policy with respect to the review, approval, ratification, and disclosure of all related person transactions by our audit committee. In accordance with the policy, our audit committee has overall responsibility for implementation of and compliance with the policy. A “related person” means a director, executive officer, or beneficial holder of more than 5% of our outstanding common stock, or any immediate family member of the foregoing, as well as any entity at which any such person is employed, is a partner or principal (or holds a similar position), or is a beneficial owner of a 10% or greater direct or indirect equity interest. Our directors and executive officers must inform our general counsel at the earliest practicable time of any plan to engage in a potential related persons transaction. For purposes of the policy, a “related persons transaction” is a transaction, arrangement, or relationship (or any series of similar transactions, arrangements or relationships) in which we were, are, or will be a participant and the amount involved exceeded, exceeds, or will exceed $120,000 and in which any related person (as defined in the policy) had, has, or will have a direct or indirect material interest. A “related persons transaction” does not include any employment relationship or transaction involving an executive officer and any related compensation resulting solely from that employment relationship that has been reviewed and approved by the Board, the compensation committee, or a group of independent directors performing a similar function. Further, we have determined that “related persons transactions” do not include transactions in which the related person’s interest derives solely from his or her service as a director of another entity that is a party to the transaction.

The policy requires that notice of a proposed related persons transaction be provided to our legal department prior to entry into such transaction. If our legal department determines that such transaction is a related persons transaction, the proposed transaction will be submitted to our audit committee for consideration at its next meeting or, in those instances in which the legal department, in consultation with the Chief Executive Officer or the Chief Financial Officer, determines that it is not practicable or desirable for us to wait until the next audit committee meeting, to the Chair of the audit committee. Under the policy, our audit committee or the Chair of the audit committee, as applicable, may approve only those related persons transactions that: (i) are in our best interests; or (ii) are not inconsistent with our best interests. In the event that we become aware of a related persons transaction that has not been previously reviewed, approved, or ratified under the policy and that is ongoing or is completed, the transaction will be submitted to the audit committee or Chair of the audit committee so that it may determine whether to ratify, rescind, or terminate the related persons transaction.

The policy also provides that the audit committee will review certain previously approved or ratified related persons transactions that are ongoing to determine whether the related persons transaction remains in our best interests and the best interests of our stockholders.

Additionally, we make periodic inquiries of directors and executive officers with respect to any potential related persons transaction of which they, or any of their immediate family members, may be a party or of which they may be aware.

RELATED PERSONS TRANSACTIONS

Mr. Tarkoff served as a member of the Board from June 2016 through September 2018, and is the former President and Chief Executive Officer of Lithium Technologies. In June 2017, we entered into a three-year agreement with Lithium Technologies pursuant to which Lithium Technologies agreed to provide subscription and professional services to us in support of our automotive retail and adjacent industry solutions in exchange for an aggregate fee of up to $955,000. In fiscal 2018, we made payments of approximately $108,000 to Lithium Technologies. In June 2017, the agreement with Lithium Technologies was approved by the Board, including all of the members of the audit committee in accordance with the policy, and was subsequently reviewed and affirmed by the audit committee during fiscal 2018. Mr. Tarkoff resigned as President and Chief Executive Officer of Lithium Technologies in February 2018, and resigned as a director of the Company in September 2018.

Ron L. Frey has served as an executive officer of the Company since April 2017. On April 3, 2018, the Company acquired 100% of the membership interests of Progressus Media LLC (“Progressus”). Mr. Frey had an advisory relationship with Progressus that entitled him to a portion of the proceeds from a sale of Progressus under a unit appreciation rights agreement. The acquisition was made pursuant to a membership interest purchase agreement with customary representations, warranties, covenants, and indemnities by Progressus and the Company. The membership interest purchase agreement was approved by the Board, including all of the members of the audit committee in accordance with the policy. The acquisition date fair value of the total consideration transferred was $22.2 million which consists primarily of an initial cash price of $16.2 million, net of cash acquired, the fair value of the holdback provision of $0.3 million and the fair value of contingent consideration of $5.7 million, which is payable upon achievement of certain milestones and metrics over a three year period ending on March 31, 2021. At the time of the closing, $500,000 of the Company's initial cash price was paid to Mr. Frey to settle Progressus' obligation under the terms of the unit appreciation rights agreement.

COMPENSATION OF NON-EMPLOYEE DIRECTORS

The compensation program for non-employee directors is designed to: (i) fairly pay directors for the work required at a company of our size and scope; (ii) align directors’ interests with the long-term interests of our stockholders; and (iii) be simple, transparent, and easy for our stockholders to understand.

OVERVIEW

For the service year beginning immediately after the 2017 Annual Meeting, our non-employee directors received base annual compensation as shown in the table below. There are no additional meeting fees. The Chairman of the Board and the Chairperson of each Board committee receive additional compensation due to the workload and broad responsibilities of these positions.

FORM OF PAYMENT

Of the $280,000 retainer, $165,000 is paid in the form of restricted stock units (“RSUs”) and $115,000 may, at the election of each director, be paid in cash or in deferred stock units (“DSUs”). One-half of the additional $150,000 paid to the Chairman is paid in the form of mandatory DSUs and one-half may, at the election of the Chairman, be paid in cash or in DSUs. 100% of the committee Chair compensation is paid in cash or DSUs at the election of each committee Chair.

TIME OF PAYMENT

Equity awards, including mandatory and elective DSUs, are granted in full on or about the date of each annual meeting. Directors who elect to be paid in cash are paid the cash portion of their compensation quarterly in arrears beginning with the quarter following the effective date of appointment, and subsequently, beginning with the quarter following each annual meeting.

HOW NON-EMPLOYEE DIRECTOR RSUs WORK

The restricted period with respect to the RSUs lapses on the earlier of one year from the grant date and the date of our next annual meeting of stockholders. Upon the lapse of the restricted period, the RSUs either settle or convert to DSUs based on the prior election of each director. If converted to DSUs, when a dividend is paid on our common stock after the lapse of the restricted period, but prior to a director ceasing to serve on the Board, such director’s account is credited with a dividend equivalent in an amount equal to the cash dividend. When a director ceases to serve on the Board, such director will receive a number of shares of common stock equal to the number of converted DSUs in such director’s account and a cash payment equal to the dividend equivalents accrued, without interest. Non-employee directors do not have any voting rights with respect to their RSUs or the converted DSUs.

HOW NON-EMPLOYEE DIRECTOR DSUs WORK

DSUs are fully vested when credited to a director’s account. When a dividend is paid on our common stock, each director’s account is credited with a dividend equivalent in an amount equal to the cash dividend. When a director ceases to serve on the Board, such director will receive a number of shares of common stock equal to the number of DSUs in such director’s account and a cash payment equal to the dividend equivalents accrued, without interest. Non-employee directors do not have any voting rights with respect to their DSUs.

ONE-TIME RETAINER

During fiscal 2018, in support of the Board's oversight responsibilities for the Company's fiscal 2019 strategic plan, and at the request of the Chairman, Mr. Tarkoff provided supplemental strategic planning review and oversight duties for the Board. In recognition of the additional workload that he assumed, on August 7, 2018, the Board approved a $60,000 one-time supplemental cash retainer for Mr. Tarkoff.

CHANGES TO DIRECTOR COMPENSATION

The nominating and governance committee periodically reviews director compensation and recommends any changes to the Board for approval. Based on the recommendation of the nominating and governance committee, the Board last approved an adjustment to director compensation in connection with the 2017 review for the service year beginning immediately after the 2017 Annual Meeting. The approval superseded the prior adjustment made immediately after the 2015 Annual Meeting, and increased each non-employee director's base annual compensation by $35,000, of which $20,000 is in the form of RSUs and $15,000 is elective, and increased the audit committee Chair retainer by $5,000 to $20,000.

STOCK OWNERSHIP REQUIREMENTS FOR NON-EMPLOYEE DIRECTORS

The stock ownership requirements set forth in the Corporate Governance Guidelines are intended to promote ownership in our stock by our non-employee directors and to align their financial interests more closely with those of our other stockholders. Each non-employee director is required to hold a minimum level of ownership of our common stock and/or DSUs while serving as a director, equal to five times the annual cash retainer payable to each director (excluding committee chair retainers, but including the Chairman's retainer and without regard to DSU elections). RSUs for which the restricted period has not lapsed do not count toward the ownership requirements. Directors will retain all shares of our common stock received pursuant to their service as a Board member until this minimum level is reached. Each director has five years from the date of his or her first election to the Board to attain this ownership threshold. In addition, non-employee directors are required to hold for at least one year the net shares obtained from exercising stock options after selling sufficient shares to cover the exercise price, taxes, and broker commissions. As of the end of fiscal 2018, the non-employee directors had satisfied, or progressed toward, the stock ownership guidelines as follows:

ANTI-HEDGING, ANTI-SHORT SALE, AND ANTI-PLEDGING POLICY

Our Insider Trading Policy prohibits directors, executive officers, and employees from purchasing any financial instrument that is designed to hedge or offset any decrease in the market value of our common stock. Our directors, executive officers, and employees are also prohibited from engaging in short sales related to our common stock. The policy also prohibits any pledging of our common stock, including holding common stock in a margin account.

DIRECTOR COMPENSATION TABLE FOR FISCAL 2018

The following table presents compensation for our non-employee directors for fiscal 2018.

Footnotes:

As of June 30, 2018, each non-employee director held 2,467 RSUs for which the restricted period had not lapsed.

As of June 30, 2018, each non-employee director held the following quantity of DSUs, exclusive of cash-settled dividend equivalents earned: Mr. Brun, 21,153; Mr. Deese, 13,674; Ms. Hillman, 20,809; Ms. Martinson, 3,770; Mr. Miles, 15,323; Mr. Radway, 14,452; Mr. Schuckenbrock, 4,842; Mr. Sowinski, 13,674; and Mr. Tarkoff, 5,425.

As of June 30, 2018, each non-employee director held the following quantity of outstanding stock options: Mr. Brun, 15,384; Mr. Deese, 15,384; Ms. Hillman, 15,384; Ms. Martinson, 0; Mr. Miles, 0; Mr. Radway, 15,384; Mr. Schuckenbrock, 0; Mr. Sowinski, 15,384; and Mr. Tarkoff, 0.

COMPENSATION OF NAMED EXECUTIVE OFFICERS

PROPOSAL 2: AN ADVISORY VOTE TO APPROVE COMPENSATION OF NAMED EXECUTIVE OFFICERS

As discussed in the Compensation Discussion and Analysis (“CD&A”) section of this proxy statement, the Board believes that our long-term success depends in large measure on the talents and efforts of our employees. Our compensation system plays a significant role in our ability to attract, retain, and motivate the highest quality workforce. The principal underpinnings of our compensation system are an acute focus on performance, stockholder alignment, sensitivity to the relevant marketplace, and a long-term orientation.

In accordance with Section 14A of the Exchange Act, we are asking our stockholders to vote on an advisory basis, commonly referred to as “say on pay,” to approve the compensation paid to our Named Executive Officers (“NEOs”) as disclosed in the CD&A, the compensation tables and the related narrative disclosure contained in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies, and practices described in this proxy statement.

This advisory proposal is not binding on the Board or us. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and the Board, and accordingly, the Board and the compensation committee intend to consider the results of this vote when making determinations in the future regarding NEO compensation arrangements.

Advisory approval of this proposal requires the vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting.

RESULTS OF 2017 STOCKHOLDER ADVISORY VOTE TO APPROVE COMPENSATION OF NAMED EXECUTIVE OFFICERS

The compensation committee considers the outcome of prior stockholder advisory votes to approve compensation of our named executive officers when making future decisions relating to the compensation of the executive officers identified in the CD&A and our executive compensation programs and policies.

At the 2017 Annual Meeting, stockholders expressed their support of our fiscal 2017 executive compensation programs with approximately 79% of the votes cast for approval of the “say on pay” proposal, which was a decrease from the average of 96% program support for 2015 and 2016.

We anticipated a modest reduction in “say on pay” support in response to the decision to grant long-term equity incentive compensation awards for both fiscal 2017 and fiscal 2018 during fiscal 2017. The compensation committee believes that the combined grants were well-timed and an important part of the fiscal 2017 compensation mix designed to closely align executive compensation with the Company's business transformation plan intended to build sustainable long-term stockholder value. The compensation committee also believes that such awards were carefully designed to be consistent with the Company's strategic-planning process and high ethical standards in that the “pull forward” equity awards will vest as if actually awarded in fiscal 2018, are predominantly performance-conditioned, and are based on financial measures with rigorous goals.

Nevertheless, we were disappointed with the results of the vote and wanted to hear from our stockholders what drove the decrease in support. Following the 2017 Annual Meeting, we engaged in direct dialogue with stockholders holding more than 25% of our outstanding common stock. We understand that stockholders were concerned about our grant of fiscal 2018 “pull forward” equity awards during fiscal 2017 and their impact on the amount of total equity awarded during fiscal 2017. In response, we have maintained our commitment not to make additional regular annual equity awards during fiscal 2018. We will continue to engage in direct dialogue with our stockholders regarding our executive compensation programs and policies to ensure that investors understand the manner in which our policies support our long-term strategic objectives.

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes our compensation philosophy and summarizes the material components of our fiscal 2018 executive compensation program for our NEOs. Our NEOs for fiscal 2018 were:

Mr. Brunz served as Interim Chief Financial Officer from June 1, 2017, to August 9, 2017, the date on which Joseph A. Tautges began service as Chief Financial Officer.

EXECUTIVE SUMMARY

Our executive compensation program is designed to create long-term stockholder value by aligning the interests of our executive officers with those of our stockholders. In order to accomplish this objective, we provide a competitive executive compensation program that enables us to attract and retain highly talented individuals, and we link their pay directly to the achievement of performance goals designed to foster the creation of sustainable long-term stockholder value.

Fiscal 2018 Performance Highlights

Fiscal 2018 was a pivotal year for CDK Global. We exceeded our three-year business transformation plan adjusted EBITDA growth and margin expansion targets originally set at the end of fiscal 2015 and met our commitment to return $750 million to $1 billion of capital to our stockholders during calendar year 2017. At the same time, we grew diluted net earnings per share by 40% on a GAAP basis, and 27% on a non-GAAP adjusted basis. We also executed on our leadership succession plan and transitioned to a new CFO and a new President of our largest segment, Retail Sales North America.

We accomplished all of this while also implementing strategic actions to re-energize our transformed business for future growth. We enhanced our product portfolio through strategic acquisitions, including Dealer Dashboard Enterprises, a leader in reporting solutions for auto dealers, and Progressus Media, a specialty provider of mobile advertising solutions for dealerships, agencies, and automotive marketing companies. In addition, we announced innovative product initiatives, including Drive Flex DMSaaS, a cloud-based DMS product focused on smaller dealerships, and Fortellis Automotive Commerce Exchange, a technology platform focused on allowing developers, OEMs and dealers to leverage, build, innovate, and securely integrate solutions and workflows to transform their businesses.

In spite of these accomplishments, we were disappointed with our revenue growth for fiscal 2018. We entered fiscal 2019 focused on growing our revenue, while also continuing the business transformation plan in support of our adjusted EBITDA and capital return targets.

Fiscal 2018 Operating Results¹

¹ Financial results, including the GAAP to non-GAAP reconciliations, are reflected as reported in the Company's Annual Report on Form 10-K for fiscal 2018.

Business Transformation Plan Results¹

¹ Financial results, including the GAAP to non-GAAP reconciliations, are reflected as reported to the Company’s Annual Report on Form 10-K for fiscal 2018.

Return to Stockholders

Return of Capital

In January 2017, the Board authorized us to repurchase up to $2.0 billion of our common stock as part of return of capital plan through which we expect to return approximately $750.0 million to $1.0 billion per calendar year through calendar 2019 via a combination of dividends and share repurchases. Consistent with that goal, during calendar year 2017, we returned $755.0 million of capital to stockholders.

Total Stockholder Return

We have delivered significant long-term TSR as evidenced by the chart below, which shows how a $100 investment in CDK Global on October 1, 2014 (the date of our spin-off from ADP) would have grown to $216 on June 30, 2018, assuming all cash dividends were reinvested. The chart also compares the TSR on an investment in our common stock to the same investment in the: (i) Standard & Poor's (S&P) 500 Index, (ii) S&P MidCap 400 Index, and (iii) S&P 400 Information Technology Index over the same period.

The comparisons in the graph above are based upon historical data and are not indicative of, or intended to forecast, future performance of our common stock. The graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, each as amended, except to the extent that we specifically incorporate it by reference into such filing.

Fiscal 2018 Executive Compensation Highlights

Cash Compensation

Base Salary

We provide competitive fixed, non-variable compensation for the expertise and knowledge that each executive brings to his or her role, thereby mitigating pressure to support high-risk business strategies.

Annual Incentive Cash Bonus

We provide an annual incentive cash bonus to align each senior executive's interests with our stockholders’ interests, and to reinforce key strategic initiatives and encourage superior individual performance. Annual incentive cash bonus payments are made to executive officers under the 2014 Plan, which was approved by stockholders at our 2015 Annual Meeting. The payouts are limited to 200% of target. For fiscal 2018, bonus achievement was based on the following performance measure targets and weights: (i) fiscal 2018 adjusted EBITDA margin of 35.5% (25%); (ii) fiscal 2018 adjusted EBITDA of $813 million (20%); (iii) fiscal 2018 global revenue growth of 4% (20%); (iv) fiscal 2018 global sales of $328 million (15%); and (v) individual MBOs (20%).

While the Company exceeded its three-year business transformation plan adjusted EBITDA margin target, actual overall achievement against the fiscal 2018 bonus plan objectives was mixed. The Company achieved its adjusted EBITDA margin and global sales targets, but did not meet the adjusted EBITDA or global revenue growth targets. This resulted in a 70.9% calculated payout versus the 80% target payout for all non-MBO financial measures. The compensation committee then applied negative discretion to yield an overall achievement of 60% on all non-MBO financial targets. The calculation of our fiscal 2018 annual incentive cash bonus payout is described in more detail below under “Compensation Review and Determination - Cash Compensation - Annual Incentive Cash Bonus.”

Long Term Equity Incentive Compensation

Performance Stock Units and Stock Options

The Company's fiscal 2018 long-term equity incentive compensation for its executives consisted of grants of PSUs for 70% of total award value, which cliff vest at the end of a three-year performance period based on actual achievement of performance goals set at the time of the grant, and stock options for the remaining 30% of total award value, which have pro rata annual vesting over four years. In fiscal 2017, the compensation committee approved grants of both fiscal 2017 and fiscal 2018 PSUs and stock options for all executives, including the Chief Executive Officer. The fiscal 2018 PSUs and stock options granted in fiscal 2017 are referred to as “pull forward” awards.

At the time of the grant, the “pull forward” PSU and stock option vesting schedules were set by the compensation committee as if the awards were made in fiscal 2018. As an additional condition to the grant, the compensation committee determined that recipients of fiscal 2018 “pull forward” awards would forgo receipt of any additional regular annual long-term equity incentive awards in fiscal 2018.

The compensation committee maintained its commitment to forgo additional regular annual awards in fiscal 2018. Accordingly, the only equity awards granted in fiscal 2018 were to Mr. Tautges in connection with his first year of service with the Company, and special one-time grants of: (i) restricted stock awarded to Mr. Brunz in recognition for his services as interim chief financial officer during fiscal 2017 and fiscal 2018, and interim chief human resources officer during fiscal 2017; and (ii) restricted stock and fiscal 2018 PSUs awarded to Mr. Flynn to encourage retention in recognition of his criticality to the success of the business transformation plan.

Settlement of Fiscal 2016 Performance Stock Units

Our executives, including the NEOs, with the exception of Mr. Tautges, Ms. Byrne, and Mr. Crutchfield, were awarded fiscal 2016 PSUs which had a three-year performance period that ran from July 1, 2015, to June 30, 2018. Performance goals for the period were set by the compensation committee in September 2015. The primary performance goal was aligned with our three-year business transformation plan adjusted EBITDA margin goal of 35% for full-year fiscal 2018, such that achievement of the business transformation plan goal would result in a maximum number of PSUs earned at 200% of target. The number of PSUs earned was subject to further

adjustment depending on the TSR of our common stock during the performance period compared against a performance peer group of companies in similar GICS codes, as well as digital advertising and marketing companies. Lastly, if our compounded annual revenue growth over the performance period cycle was below 3%, awards would be capped at 100% of target.

The fiscal 2016 PSUs were settled at 162.5% of target. This is based on achievement at 200% of target for our fiscal 2018 adjusted EBITDA margin of 35.9%, multiplied by 81.25% for our three-year TSR ranking at the 31^st percentile. Finally, the payout was not subject to the cap because our compounded annual revenue growth of 3.7% exceeded the 3% floor. Our PSU awards are described in more detail below under “Compensation Review and Determination - Long-Term Equity Incentive Compensation - Performance-Based Stock Units.”

Total Direct Compensation

A summary of fiscal 2018 total direct compensation for our NEOs is set forth in the following table, and additional detail is presented in the subsequent discussion as well as the tables and narratives that follow this CD&A. The amounts reported in this table differ substantially from the amounts reported in the Summary Compensation Table calculated based on SEC rules. This table supplements, but is not a substitute for the Summary Compensation Table.

In order to show the effect that the grant of fiscal 2018 “pull-forward” awards made during fiscal 2017 had on fiscal 2018 total direct compensation, we have included the following table that shows fiscal 2018 total direct compensation plus the fiscal 2018 “pull-forward” awards. The amounts reported in this table differ substantially from the amounts reported in the Summary Compensation Table calculated based on SEC rules. This table supplements, but is not a substitute for the Summary Compensation Table.

COMPENSATION PRINCIPLES

We believe that compensation should be designed to create a direct link between performance and stockholder value. Five principles that guide our decisions involving executive compensation are that an executive’s compensation should be:

Our compensation programs are designed so that target pay reflects the market for the executive’s skills and experience, and relative levels of responsibility among our key executives. In addition, the proportion of pay tied to operating performance and changes in stockholder value varies directly with executives’ levels of responsibility and accountability to stockholders. We assign all executives to pay grades by comparing their position-specific duties and responsibilities with market data and our internal management structure. Each pay grade has ranges for base salary, total annual cash compensation, and annual equity grants. Executives are positioned within these ranges based on a variety of factors, most notably their experience and skill set and their performance over time.

We design our performance-based compensation so that actual, realized compensation will vary relative to the target award opportunity based on performance. As such, actual compensation amounts may vary above or below targeted levels depending on our overall performance and the achievement of individual performance goals. We have adopted this compensation design to provide meaningful incentives for our key executives to achieve superior results. We also believe that it is important for our executive officers and other senior executives to have an ongoing long-term investment in us as outlined in this proxy statement under “Stock Ownership Guidelines.”

GOOD GOVERNANCE AND BEST PRACTICES

We are committed to ensuring that our compensation programs reflect principles of good governance. The following practices are key aspects of our compensation program:

ELEMENTS OF COMPENSATION

The following table summarizes the major elements of our fiscal 2018 executive officer compensation programs:

Consistent with a pay-for-performance philosophy, compensation for Mr. MacDonald and the other NEOs is structured so that a significant portion of their total compensation is at-risk and paid based on meeting certain performance goals. The mix of target total direct compensation (base salary, cash bonus, and long-term incentive awards) for fiscal 2018 was designed to deliver the following approximate proportions of total compensation to Mr. MacDonald and the other NEOs (on average) if Company-wide and individual target levels of performance are achieved. Mr. MacDonald’s higher portion of at-risk compensation reflects his greater responsibility for overall Company performance.

CEO and NEO Total Direct Compensation Mix at Target

COMPENSATION REVIEW AND DETERMINATION

Role of the Compensation Committee

The compensation committee oversees and administers our executive compensation programs. Either before or near the beginning of the fiscal year the compensation committee reviews the executive compensation program and establishes base salaries, target annual cash bonus opportunities, and long-term incentive awards for executives and other eligible employees.

The compensation committee examines summary compensation sheets detailing the amounts and mix of base salary, cash bonus, and long-term equity incentives for each of the NEOs, which compare the amounts and mix to competitive compensation levels. We generally target base salary, annual cash bonus, and long-term equity incentives at the median of competitive compensation levels, but will set targets above or below the median when warranted in the judgment of the compensation committee. The degree to which target compensation ranges are above or below the median competitive rate is based on each executive’s skill set and experience relative to market peers. Executives who are new in their roles and therefore less experienced than market peers are typically positioned lower in the range, whereas executives with a long tenure in their role may be positioned higher in the range.

Role of the Compensation Adviser

Our compensation committee has engaged FW Cook as its independent external advisor to provide assistance with the design of our compensation programs regarding the amount and types of compensation that we provide our executives, and how these compare to peer company compensation practices. In June 2017, FW Cook examined the competitiveness of senior executive compensation levels and the Company’s aggregate share usage, dilution, and fair value cost of long-term incentives for all participants, which was used for setting fiscal 2018 target total compensation.

Representatives of FW Cook attend meetings of the compensation committee as requested and may also communicate with the Chair of the compensation committee outside of meetings. As part of its ongoing support to our compensation committee, FW Cook also reviews executive compensation disclosures, reviews and provides comments on changes to the committee’s charter, advises on emerging trends and the implications of regulatory and governance developments, and reviews and provides commentary on materials and proposals prepared by

management that are presented at the committee’s meetings. FW Cook also advises our nominating and governance committee on director compensation and conducts biennial competitive reviews of director compensation.

Role of Competitive Market Data

Survey Market Data

With respect to the total cash and long-term incentive compensation for our Chief Executive Officer and other NEOs, the compensation committee reviews competitive compensation market data based on compensation surveys reflecting the pay practices of publicly traded companies and our compensation peer group, discussed below, as a second market reference. The surveys used were the Willis Towers Watson U.S. General Industry Executive Database, the Aon Hewitt U.S. Total Compensation Measurement Executive Survey, and the Radford Global Technology Survey. The general industry surveys are weighted 50% and the technology survey is weighted 50%. In benchmarking compensation levels against the survey data, the compensation committee considered only the aggregated survey data, and the identity of the companies included in the survey data is not disclosed to, or considered by, the compensation committee in its decision-making process. The companies included were based on a revenue range such that the median company revenue approximates the annual revenue for CDK Global or the executive’s business unit, as appropriate. The compensation committee also compared the aggregate level of each executive officer’s compensation and compared it against the executive’s previous year’s totals and against compensation of our other executive officers.

Peer Companies

For fiscal 2018, the compensation committee approved changing the compensation peer group to better align with our evolving business strategy and revenue mix. The new peer group was developed with assistance from FW Cook. Peer group selection focused on U.S. -based publicly traded companies in GICS sub-industry categories that were in our previous compensation peer group, in our Institutional Shareholder Services (“ISS”) peer group, and companies with similar customer profiles and/or business operations. We increased the proportion of companies in the Application/Systems Software, Automotive Retail, and Internet Software & Services industries, with an emphasis on companies with digital marketing operations, and decreased the proportion of companies in the Data Processing & Outsourced Services and IT/Research Consulting industries. Companies continued to be selected that are of a similar business model to CDK (including B-to-B operations, back-office services, and digital marketing services), that are similar size to CDK with revenues that are 33% to 300% of our annual revenue, and that are considered to be a peer by ISS and prevalent peer or peers. The following companies made up our peer group for fiscal 2018 compensation decisions:

Role of Management

The Chief Executive Officer provides recommendations to the compensation committee with respect to each NEO’s overall performance and actual achievement against performance objectives, and in the determination of each NEO’s compensation, other than his own. The compensation committee takes the Chief Executive Officer’s general input into consideration when reviewing and approving compensation for NEOs other than the Chief Executive Officer.

The Chief Executive Officer and Chief Human Resources Officer participate in the development of the performance criteria measures and any plan design changes for our annual bonus and equity plans. The Chief Human Resources Officer presents the plan design changes to the compensation committee for their review and approval.

CASH COMPENSATION

Base Salary

Base salaries represent fixed amounts paid to each executive for performing their normal duties and responsibilities. For fiscal 2018, the compensation committee determined the amount based on the executive’s overall performance in prior years, level of responsibility, pay grade, competitive positioning, and comparison to our other executives. Based on these criteria, our NEOs received the following annual salary increases in fiscal 2018:

Annual Incentive Cash Bonus Program

Program Design

The NEOs are eligible to earn an annual incentive cash bonus under the 2014 Plan as a way to align each NEO's interests with our stockholders’ interests, and to reinforce key strategic initiatives and encourage superior individual performance. Potential payouts are capped at 200% of target based on actual performance against financial metrics and MBOs. There is no minimum payment level, and the entire award opportunity is forfeited if threshold performance metric goals are not achieved. When making final payout determinations, the compensation committee may exercise negative discretion to award less than the maximum potential bonus based on actual performance metric goal achievement.

Each year the compensation committee approves bonus performance metrics aligned with the key components of our operational and strategic success and the degree to which the Chief Executive Officer and the other NEOs have responsibility for overall performance results. They also provide a set of common objectives that facilitate collaborative engagement.

For fiscal 2018, the compensation committee also established a threshold corporate performance “umbrella” target based on adjusted earnings per share. This metric must be met or exceeded before annual incentive bonus awards are made to our NEOs. Federal legislation passed on December 22, 2017, repealed the performance-based compensation exemption, for fiscal years beginning after December 31, 2017; therefore, this process allows the entire amount of the annual incentive bonus award to be considered performance-based and tax deductible under Section 162(m).

For fiscal 2018, incentive bonus achievement was based on four core financial performance metrics and, as a fifth metric, individual MBOs. Each of the five metrics is capped at 200% of target. The specific metrics and the weighting that was placed on each, are as follows:

Individual MBOs enhance focus on business objectives, such as operational objectives, strategic initiatives, succession planning, and talent development, which are important to the long-term success of the Company. The four financial performance metrics are defined and explained in greater detail as follows:

Design Changes for Fiscal 2018

The terms of the fiscal 2018 annual incentive cash bonus program remained largely consistent with those of the program from the prior year, but there were two changes made to better align executives' interests to the interests of our stockholders:

Fiscal 2018 Financial Results

In August 2018, the compensation committee reviewed and determined performance against the four core financial performance metrics as follows:

Discussion of MBOs

With respect to performance against the MBOs, the compensation committee evaluated Mr. MacDonald's performance during an executive session held in August 2018. The evaluation included an analysis of Mr. MacDonald's performance against all of his individual MBOs, which included, but were not limited to: continued development of longer-term CDK Global strategy, development of CDK International longer-term product strategy, and continued evolution of a customer-first culture across CDK Global. After conducting a thorough review of Mr. MacDonald's performance, the compensation committee determined that Mr. MacDonald's MBO performance had been achieved at target.

As the Chief Executive Officer, Mr. MacDonald evaluated the performance of the other executive officers and presented his recommendations to the compensation committee in August 2018 based on those evaluations. The evaluations included an analysis of each officer's performance against his or her individual MBOs, which are intended to be differentiated performance metrics. After discussion, the compensation committee determined the degree of attainment of the MBOs. The results of these evaluations and selected MBOs for the other NEOs are summarized below:

Mr. Tautges. The compensation committee determined that Mr. Tautges' MBO performance had been achieved above target. Mr. Tautges' MBOs included: supporting the business transformation plan roll-out and meeting targets for fiscal 2018 and fiscal 2019, and identifying opportunities for additional savings and how to accelerate the savings.

Mr. Flynn. The compensation committee determined that Mr. Flynn's MBO performance had been achieved above target. Mr. Flynn's MBOs included: successfully launching key OEM website programs, improving implementation and resolution times, driving break-through improvements in implementation, and continued improvement in KPIs and identified metrics, and actions to drive a process culture throughout the Company.

Ms. Byrne. The compensation committee determined that Ms. Byrne's MBO performance had been achieved above target. Ms. Byrne's MBOs included: performing a broader assessment of organizational effectiveness, and leading improvement in talent assessments.

Mr. Crutchfield. The compensation committee determined that Mr. Crutchfield's MBO performance had been achieved above target. Mr. Crutchfield's MBOs included: improving resiliency across product lines, and begining migration of appropriate products to the cloud.

Mr. Brunz. The compensation committee determined that Mr. Brunz's MBO performance had been achieved above target. Mr. Brunz's MBOs included: managing litigation issues, keeping the executive team involved and engaged with legal issues, assisting with a longer-term strategic review for the Board, and assisting with the evolution of the Company's Partner Program.

Based on the findings of these performance evaluations, the compensation committee evaluated performance against the non-financial metrics for the NEOs to determine the overall level of achievement in the table below. We do not disclose detailed MBO goals for each NEO out of concern for competitive harm.

Fiscal 2018 Annual Incentive Cash Bonus Payouts

Based on the fiscal 2018 financial and non-financial level of performance described above, the calculated annual incentive results for the NEOs under the annual incentive cash bonus program ranged between 90.9% and 98.9% of target. However, due to the underachievement of the Company's revenue growth performance, the compensation Committee exercised its authority to apply negative discretion and determined that the percentage of target annual incentive funded for financial metrics would be reduced to 60% for all NEOs. The calculated annual incentive awards prior to and after the compensation committee's application of negative discretion are reflected in the table below.

LONG-TERM EQUITY INCENTIVE COMPENSATION PROGRAMS

We believe that long-term incentive compensation is a significant factor in attracting and retaining key executives and in aligning their interests directly with the interests of our stockholders. The Company's fiscal 2018 long-term equity incentive compensation for its executives consisted of grants of PSUs for 70% of total award value, which cliff vest at the end of a three-year performance period based on actual achievement of performance goals set at the time of the grant, and stock options for the remaining 30% of total award value, which have pro rata annual vesting over four years. Each executive officer is awarded a target dollar value of PSUs and stock options. The target dollar value is converted into grants of the respective award based on the closing stock price on the date of grant and the grant date fair value of options.

The compensation committee selected these awards because they ensure that the overall long-term incentive program is tied closely to changes in stockholder value and the degree to which critical operating objectives are attained and they support our talent retention objectives. The compensation committee may also from time to time grant discretionary awards of time-based restricted stock and RSUs. These awards are for special situations and are not considered in the target allocation of total long-term incentive compensation between PSU awards and stock option grants.

In fiscal 2017, the compensation committee approved grants of both the fiscal 2017 and the fiscal 2018 PSUs and stock options for all executives, including the Chief Executive Officer. At the time of the grant, the “pull forward” PSU

and stock option vesting schedules were set by the compensation committee as if the awards were made in fiscal 2018. As an additional condition to the grant, the compensation committee determined that recipients of fiscal 2018 “pull forward” awards would forgo receipt of any additional regular annual long-term equity incentive awards in fiscal 2018.

The compensation committee maintained its commitment to forgo additional regular annual awards in fiscal 2018. Accordingly, the only equity awards granted in fiscal 2018 were to Mr. Tautges in connection with his first year of service with the Company, and special one-time grants of: (i) restricted stock awarded to Mr. Brunz in recognition for his services as interim chief financial officer during fiscal 2017 and fiscal 2018, and interim chief human resources officer during fiscal 2017; and (ii) restricted stock and fiscal 2018 PSUs awarded to Mr. Flynn to encourage retention in recognition of his criticality to the success of the business transformation plan.

The awards granted during fiscal 2018, which include fiscal 2018 PSUs and stock options and fiscal 2018 restricted stock for Messrs. Tautges, Flynn, and Brunz, are summarized in the table below (the fair market value of these awards can be found in the “Grants of Plan-Based Awards” Table on page 53 of this proxy statement):

Performance-Based Stock Units

We granted fiscal 2018 “pull forward” PSUs to all of our officers in fiscal 2017 based upon their pay grades, and for officers other than the Chief Executive Officer, based on input from the Chief Executive Officer to the compensation committee. The fiscal 2018 “pull forward” PSU program was approved by the compensation committee in fiscal 2017 based on the following financial objectives that are measured over a three-year performance period that runs from July 1, 2017, to June 30, 2020.

Potential payouts can range from 50% to 200% of target for threshold and maximum performance respectively. If threshold performance is not achieved, the PSUs will be forfeited. The number of PSUs earned is subject to further adjustment (increase or decrease) depending on the TSR of our common stock during the three-year performance period compared against a performance peer group of companies in similar GICS codes, which can increase the

maximum payout to 250% of target. Lastly, if our compounded annual revenue growth over the three-year performance cycle is below 3%, awards are capped at 100% of target. The following table displays the EBITDA goals for the performance period, and the impact of relative TSR on the award payout:

After the conclusion of the three-year performance cycle the compensation committee will confirm the final EBITDA results to determine the percentage of target achieved based on such results by using straight-line interpolation between lower and upper bounds of the award range. The compensation committee will also confirm the three-year TSR and compounded annual revenue growth results for the performance period. The PSU award earned will also be credited with dividend equivalents from the grant date of the target award until the issuance date, assuming all dividends were reinvested in our stock at the time dividends are paid. The PSUs earned will be paid in the form of shares of our common stock following the conclusion of the three-year performance period.

We believe that this program is aligned to our business transformation plan to grow revenues and margin and further the Company’s long-term financial goals by aligning the compensation of our key executives with our long-term operating performance, creating commonality of interest between executives and stockholders, and supporting our talent retention objectives.

Settlement of Fiscal 2016 PSUs

Our executives, including the NEOs, with the exception of Mr. Tautges, Ms. Byrne, and Mr. Crutchfield, were awarded PSUs in fiscal 2016 (“fiscal 2016 PSUs”), which had a three-year performance period that ran from July 1, 2015, to June 30, 2018. Performance goals for the period were set by the compensation committee in September 2015. The primary performance goal was aligned with our three-year business transformation plan adjusted EBITDA margin goal of 35% for full-year fiscal 2018, such that achievement of the business transformation plan goal would result in a maximum number of PSUs earned at 200% of target. The number of PSUs earned was subject to further adjustment depending on the TSR of our common stock during the performance period compared against a performance peer group of companies in similar GICS, as well as digital advertising/marketing companies. Lastly, if our compounded annual revenue growth over the performance period cycle was below 3%, awards would be capped at 100% of target.

The fiscal 2016 PSUs were settled at 162.5% of target. This is based on achievement at 200% of target for our fiscal 2018 adjusted EBITDA margin of 35.9%, multiplied by 81.25% for our three-year TSR ranking at the 31^st percentile. Finally, the payout was not subject to the cap because our compounded annual revenue growth of 3.7% exceeded the 3% floor.

Our TSR Peer Group

Our TSR peer group includes companies of any size against which we can best measure financial and business performance. Our compensation peer group disclosed above is distinguished from our TSR peer group in that the compensation peer group companies are broadly reflective of the industry in which we compete for executive talent and provide a good indicator of the current range of executive compensation for companies within a reasonable size range of CDK. The companies in our TSR performance peer group¹ are: