WASHINGTON,
(RULE 14a-101)
Securities Exchange Act of 1934
(Amendment (Amendment No. )
Check the appropriate box:
☐ | | ||
| |||
| Preliminary Proxy Statement | | |
☐ | |||
| | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
☒ | |||
| | Definitive Proxy Statement | |
☐ | |||
| | Definitive Additional Materials | |
☐ | |||
| | Soliciting Material Pursuant to §240.14a-12 | |
MercadoLibre, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
MERCADOLIBRE, INC. | ||||
(Name of Registrant as Specified In Its Charter) | ||||
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) |
☒ | | | No fee required. | | |||
☐ | | | Fee paid previously with preliminary materials. | | |||
☐ | | | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||||
|
| ||||||
|
| ||||||
|
| ||||||
|
| ||||||
|
| ||||||
|
| ||||||
|
| ||||||
|
| ||||||
|
| ||||||
|
| ||||||
|
|
Arias 3751, 7th Floor
Buenos Aires, Argentina C1430CRG
April 26, 2019
Dear Stockholder:
You are cordially invited to attend the 2019 Annual Meeting of Stockholders of MercadoLibre, Inc., which will be held at 12:00 p.m., Eastern Time, on Monday, June 10, 2019. We are pleased to note that this year’s annual meeting will be a completely virtual meeting of stockholders. You will be able to attend the 2019 Annual Meeting, vote, and submit your questions during the meeting via the Internet by visitingwww.virtualshareholdermeeting.com/MELI2019.
We are pleased to use the U.S. Securities and Exchange Commission rule that allows companies to furnish proxy materials to their stockholders primarily over the Internet. We believe that this electronic process should expedite your receipt of our proxy materials, lower the costs of our Annual Meeting, and help to conserve natural resources. On or about April 26, 2019, we first mailed to our stockholders a Notice of Internet Availability containing instructions on how to access our 2019 Proxy Statement and 2018 Annual Report and how to vote. The notice also included instructions on how to receive a paper copy of our proxy materials, including the proxy statement, proxy card and 2018 Annual Report.
Thank you and we look forward to your attendance at the 2019 Annual Meeting of Stockholders or receiving your proxy vote. On behalf of the board of directors, I would like to express our appreciation for your continued interest in MercadoLibre.
Sincerely yours,
/s/ Marcos Galperin
Marcos Galperin
Chairman of the Board, President and Chief Executive Officer
2
Arias 3751, 7th FloorBuenos Aires, Argentina C1430CRG
NOTICE OF ANNUAL MEETING OF STOCKHOLDERSTO BE HELD ON JUNE 10, 2019
To Our Stockholders:
Notice is hereby given that the 2019 Annual Meeting of Stockholders of MercadoLibre, Inc. (the “2019 Annual Meeting”) will be held at 12:00 p.m., Eastern Time, on June 10, 2019. The Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/MELI2019, where stockholders will be able to listen to the meeting live, submit questions and vote online. The meeting is called for the following purposes:
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| |
DATE & TIME | | | LOCATION | | | Record date |
Wednesday, June 8, 2022 12.00 p.m Eastern Time | | | www.virtualshareholdermeeting.com/MELI2022, where stockholders will be able to listen to the meeting live, submit questions and vote online. | | | April 12, 2022 |
| | 1 | | | To elect the |
| | 2 | | | To approve, on an advisory basis, the compensation of our named executive officers for fiscal year |
| |
|
| | To ratify the appointment of |
| | 4 | | | To transact such other business as may properly come before the meeting. |
Our board of directors has fixed the close of business on April 15, 2019 as the record date for determining the stockholders entitled to notice of and to vote at the 2019 Annual Meeting. Only stockholders of record as of the close of business on April 15, 2019 are entitled to notice of and to vote at the 2019 Annual Meeting and at any adjournment or postponement thereof. We ask that as promptly as possible you vote via the Internet, by telephone or, if you requested to receive printed proxy materials, by mailing a proxy or voting instruction card.
Whether or not you plan to attend the meeting, please read our 20192022 Proxy Statement for important information on each of the proposals, and our practices in the areas of corporate governance and executive compensation. Our 20182021 Annual Report to Stockholders contains information about MercadoLibre, Inc. (the “Company”) and our financial performance. Voting on the Internet or by telephone is fast and convenient, and your vote is immediately confirmed and tabulated. Using the Internet or telephone saves us money by reducing postage and proxy tabulation costs. Please provide your voting instructions by the Internet, telephone, or by returning a proxy card or voting instruction card. Buenos Aires, Argentina April 26, 2019By order of the board of directors, /s/ Jacobo Cohen Imach Jacobo Cohen ImachSr. Vice President,General Counsel and SecretaryImportant Notice Regarding the AvailabilityIMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2022 ANNUAL MEETING. The notice of Proxy Materialsmeeting and proxy statement for the 2019 Annual Meeting. The Notice of Meeting and Proxy Statement for the 2019 Annual Meeting2022 annual meeting and our 2018 Annual Report2021 annual report to Stockholdersstockholders are available electronically at www.proxyvote.comwww.proxyvote.com..3MercadoLibre, Inc.Arias 3751, 7th FloorBuenos Aires, Argentina C1430CRGPROXY STATEMENTINTERNET AVAILABILITY OF PROXY MATERIALSUnder U.S. Securities and Exchange Commission (“SEC”) rules, we are furnishing proxy materials to our stockholders primarily via the Internet, instead of mailing printed copies of those materials to each stockholder. On or about April 26, 2019,27, 2022, we first mailed to our stockholders (other than those who previously requested electronic or paper delivery of the proxy statement) a Notice of Internet Availability containing instructions on how to access our proxy materials, including our proxy statement and our Annual Report on Form 10-K for the year ended December 31, 20182021 (“20182021 Annual Report”Report”).
ATTENDING THE 2019 ANNUAL MEETING
Listening onAttending the Internet
| | | | |||
Live webcast |
| | Webcast starts | | | Replay | |
www.virtualshareholdermeeting.com/MELI2022 | | | at 12:00 p.m., June 8, 2022 Eastern Time |
| |
available until June |
QUESTIONS
| |||||
For questions regarding: | | | You may contact: | | |
| |||||
2022 Annual Meeting | | | MercadoLibre Investor Relations, by going to http://investor.mercadolibre.com/ | | |
| |||||
Voting Stock Ownership | |
| |||
| |||||
|
Computershare Overnight Mail Delivery: 462 South 4th Street, Suite 1600, Louisville, KY, 40202, USA Regular Mail: PO BOX 505000, Louisville, KY, 40233-5000, USA 888 313 1478 (U.S. investors) | ||||
+1 (201) 680 6578 (Non-U.S. investors) www.computershare.com/investor | |
| | 4 | | | MercadoLibre | | |
TableDear Stockholder:Hope is the confidence that something good will happen. A positive feeling that, when accompanied by action, allows us to overcome adversity. The last two years —marked by an unprecedented global pandemic— have undoubtedly put this human capacity to the test: the ability to project a future horizon better than the current one, trusting that “the best is yet to come.” For us, this is much more than a slogan: it is the power that drives us.During the last two unprecedented years, MercadoLibre has assumed the essential role of Contentsensuring access to our many important services and products that impact our users’ lives. We assumed this unique and privileged position with great responsibility. We did this also with a focus on strengthening our purpose: democratizing commerce and financial services to transform the lives of millions of people in Latin America. Today more than ever, we know that the world needs transformation. That is why we want to be better every day, taking into account the growth of our business and its environmental impact and social role.QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR 2019 ANNUAL MEETINGQ:Why am I receiving these materials?A: OurOn behalf of the board of directors, is providing these proxy materialsI would like to youexpress our appreciation for your continued interest in connection with our board’s solicitation of proxies for useMercadoLibre. We look forward to your attendance at our 2019the 2022 Annual Meeting which will take placeof Stockholders or receiving your proxy vote.Sincerely yours,Marcos GalperinChairman of the Board, Presidentand Chief Executive Officer
| | MercadoLibre 2022 Proxy Statement | | | 5 | | |
| | | | The Mercado Libre Marketplace is a fully-automated, topically-arranged and user-friendly online commerce platform, which can be accessed through our website and mobile app. This platform enables us (when we act as sellers in our first-party sales), merchants and individuals to list merchandise and conduct sales and purchases digitally. | ||
| | | | Through Mercado Libre Classifieds, our online classified listing service, our users can also list and purchase motor vehicles, real estate and services in the countries where we operate. | ||
| | | | To complement the MercadoLibre Marketplace and enhance the user experience for our buyers and sellers, we developed Mercado Pago, an integrated digital payments solution. Mercado Pago is a full ecosystem of financial technology solutions both in the digital and physical world. Our asset management product is a critical pillar to build our alternative two-sided network vision. It incentivizes our users to begin to fund their digital wallets with cash as opposed to credit or debit cards given that the return our product offers is greater than traditional checking accounts. | ||
| | | | Mercado Credito, our credit solution, leverages our user base, which is not only loyal and engaged, but has also been historically underserved or overlooked by financial institutions and suffers from a lack of access to needed credit. Facilitating credit is a key service overlay that enables us to further strengthen the engagement and lock-in rate of our users, while also generating additional touchpoints and incentives to use Mercado Pago as an end-to-end financial solution. | ||
| | | | The Mercado Envios logistics solution enables sellers on our platform to utilize third-party carriers and other logistics service providers, while also providing them with fulfillment and warehousing services. The logistics services we offer are an integral part of our value proposition, as they reduce friction between buyers and sellers, and allow us to have greater control over the full user experience. | ||
| | | | Our advertising platform, Mercado Ads, enables businesses to promote their products and services on the internet. Through our advertising platform, brands and sellers are able to display ads on our webpages through product searches, banner ads or suggested products. | ||
| | | | Complementing the services we offer, our digital storefront solution, Mercado Shops, allows users to set up, manage and promote their own digital stores. |
| | 6 | | | MercadoLibre 2022 Proxy Statement | | |
An Ecosystem of Integrated Solutions | | |
139.5M Unique active users reached considering our entire ecosystem. | | | $28.4B Gross merchandise volume (“GMV”), representing an increase of 35.5% in USD. | | | 1B Successful items sold, increasing by 41.0% year-over-year. |
$77.4B Total payment volume (“TPV”) reached, a year-over-year increase of 55.5% in USD. Total payment transactions increased 70.0% year-over-year, totaling 3.3 billion transactions in 2021. | | | $1.7B Mercado Credito’s portfolio ended 2021 at almost $1.7 billion, over 3x its size compared to the year-end in 2020. | | | |
962.3M Items shipped during 2021, representing a 48.2% year-over-year increase. | | | | |
Q:What information is contained in these materials?
A: The information included in this proxy statement relates to the proposals to be voted on at the 2019 Annual Meeting, the voting process, the compensation of our directors and our named executive officers, and certain other required information.
Q:Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
A: In accordance with SEC rules, we may furnish proxy materials, including this proxy statement and our 2018 Annual Report, which includes our audited consolidated financial statementsupcoming Form 10-K for the year ended December 31, 2018,2021, and any of MercadoLibre, Inc.’s other applicable filings with the Securities and Exchange Commission. Unless required by law, MercadoLibre, Inc. undertakes no obligation to our stockholders by providing accesspublicly update or revise any forward-looking statements to these documents onreflect circumstances or events after the Internet instead of mailing printed copies. On or about April 26, 2019, we first mailed to our stockholders (other than those who previously requested electronic or paper delivery) a Notice of Internet Availability containing instructions on how to access our proxy materials, including our proxy statement and our 2018 Annual Report. The Notice of Internet Availability also instructs you on how to access your proxy card to vote through the Internet, by telephone or by mail. You will not receive printed copies of the proxy materials unless you request them. Instead, the Notice of Internet Availability will instruct you as to how you may access and review all of the proxy materials on the Internet. If you would like to receive a paper or electronic copy of our proxy materials, including a copy of our 2018 Annual Report, you should follow the instructions in the notice for requesting these materials.
| | MercadoLibre 2022 Proxy Statement | | | 7 | | |
Q:How do I get electronic access to the proxy materials?
A: The Notice of Internet Availability will provide you with instructions regarding how to:TABLE OF CONTENTS
|
We are entrepreneurs who know that sustainability is a path of continuous improvement, with many challenges ahead but with a clear focus: the time to act is now. |
At MercadoLibre, we believe that sustainability involves every area of our business. It is a commitment that we renew every day, every time we take risks to innovate, achieve scale and generate a transformational impact. We are convinced that there is a new economy, in which it is possible to generate economic value while creating social and environmental value at the same time. This new economy will not come on its own, nor on the basis of promises: we have to act today if we want to contribute to the sustainable prosperity of our region. Under this premise, our strategy has three main focuses of action: |
|
| Boost Triple-impact Entrepreneurial Ecosystem & Positive Impact Products | | | | | Contributing to Communities | | | | | Reducing Our Environmental Impact |
We are inspired by the entrepreneurs who grow with us, as well as by those who are part of our | | | We are contributing to the communities with which we are linked through initiatives that seek to strengthen social organizations and the digital donation culture in the region. We also support the ability of young people to access formal jobs and the skills of the future by developing education and technology programs, so we can have fairer and more equitable societies. | | | We accept the challenge of continuing to grow while respecting the environment. We believe that measuring our carbon footprint is the backbone of this challenge: we seek to reduce our environmental impact throughout our value chain, while contributing to the fight against climate change through the regeneration and conservation of iconic biomes in the region. |
| | Inclusive culture | | | | | Transparency | ||
Each person who works at MercadoLibre is unique and one of a kind, with their own story, experience, and background. Therefore, we encourage everyone to feel free to be who they are, how they are, and at ease with the choices they make. | | | It is the cornerstone of how we act, as well as of the bond of trust that we create with each of our stakeholders. We believe that ethics and integrity are the pillars of inclusion and development and, as corporate citizens, we strive to promote best practices in the digital products and services we develop, while complying with applicable laws. |
| | 8 | | | MercadoLibre 2022 Proxy Statement | | |
Impact Highlights | | |
| | Boost Triple-impact Entrepreneurial Ecosystem & Positive Impact Products |
Foster Entrepreneurial Potential (Argentina, Brazil, Chile, Colombia, Mexico and Uruguay) True to our origins, we believe that entrepreneurs and SMEs play a fundamental role in driving sustainable socioeconomic development in the Latin American region. Their ability to adapt to new challenges and to understand the complexities and problems of each context, gives them a unique capacity for transformation. We create value for entrepreneurs and SMEs from the heart of our business: we drive their digital and financial inclusion; we train them in tools to take advantage of e-commerce opportunities; and we expand their business and income generation. |
■ Training: Our Sellers Center offers content, courses and seminars on topics of value for an entrepreneur, such as financial or sales strategy. |
Entrepreneurship with + Impact: Biomas (Brazil and Argentina) This program focuses on strengthening businesses linked to biodiversity. We understand that bio-economies are a solution for the conservation of biomes, which contribute to fostering sustainable production chains and promote income generation for local communities | | | 80+ projects In the Amazon, Atlantic Forest and Cerrado regions of Brazil, and Gran Chaco in Argentina |
| |
Afrolab Program (Brazil and Colombia) Since 2018, MercadoLibre has been working with Preta Hub to strengthen businesses led by black entrepeneurs. To this end, we have trained participants of the Afrolab program in online sales strategies, and promoted their entry into the MercadoLibre ecosystem, by highlighting their stories and offering their products on our platform through an exclusive official store in Feira Preta. In 2021, we joined the NGO Manos Invisibles in Colombia, to promote the digital inclusion of black entrepeneurs in that region. | | | +500 Black entrepeneurs trained in Brazil and Colombia |
| |
Positive Impact Products (Argentina, Brazil, Chile, Colombia, Mexico and Uruguay) In 2019, ■ 3.6M unique visits to the section (3x over 2020); ■ +169,000 companies sold positive-impact products (+69% over 2020); ■ +66,000 articles available in the category (+47% over 2020). | | | +4.7M Users purchased products (+37% over 2020) +9M Products sold (+344% over 2020) |
Since 2016, we have been implementing exclusive promotional campaigns for sustainable products to foster positive impact consumption. | |
| | MercadoLibre 2022 Proxy Statement | | | 9 | | |
Impact Highlights | | |
| | Community: Education and Inclusion |
Digital and Financial Education Education and social inclusion are the cornerstones of our relationship with the communities in each country where we operate. We promote initiatives and training programs that promote access to jobs, entrepreneurship and technology and more inclusive features. |
We are acting today to promote more inclusive development in Latin America. |
Networks for the Future (Argentina, Brazil and Mexico) A program that provides training to young people in technical and digital skills for insertion into the labor market, which is complemented by learning socioemotional skills needed for formal employment. | | | 1,000 Young people reached in 2021 (140 in Argentina, 500 in Brazil and 360 in Mexico) |
Conectadas (Argentina, Mexico, Brazil, Peru, Colombia, Chile and Uruguay) An immersive training program that seeks to bring young women in Latin America closer to the world of technology, providing them with tools to create innovative solutions to problems that they identify in their communities. ■150 projects with a positive impact on the ■ 89% of the girls participating in the Conectadas program recognized a positive and close link with science and technology. | | | 1,200 Young women between 14 and 18 years of age from seven countries and more than 300 locations in Latin America benefited from the program |
Entropy (Argentina) Through this program, we provide STEM (science, technology, engineering and mathematics) training to young people who are in the last year of high school in public schools in Argentina. We also provide pedagogical support for teachers interested in getting involved in the teaching of STEM subjects. ■ In 2021, 600 young people started the cycle, 24% of whom are women. ■ Entropía program has doubled the percentage of university admissions to UTN since its inception. | | | 286 Young people graduated in 2020 |
Certified TECH Developer (Argentina, Brazil and Colombia) We joined Globant and Digital House to co-create the Certified Tech Developer program that provides scholarships to young people to pursue technology careers in Argentina, Colombia and Brazil. ■ 2,500 scholarships covering 85% of tuition awarded (Argentina, Colombia and Brazil); 1,000 scholarships covering 50% of tuition awarded (Argentina). | | | +3,200 Students have completed the program |
We use a diversity perspective that prioritizes young women from low-income and other historically excluded groups. | |
| | 10 | | | MercadoLibre 2022 Proxy Statement | | |
Impact Highlights | | |
| |
Reducing Our Environmental Impact |
Carbon footprint Our environmental strategy is based on a continuous improvement process that supports MELI's sustainable growth. A central part of that management is measuring our carbonfootprint, allowing us to Since 2016, we have been measuring our |
Choosing to receive your future proxy materials by e-mail will save us the cost of printing and mailing documents to you and will reduce the impact of printing and mailing these materials on the environment. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.
Q:What proposals will be voted on at the 2019 Annual Meeting?
A: There are four proposals scheduled for a vote at the 2019 Annual Meeting:
| We follow the | | | 43.2 tn of CO2e per employee (Scopes 1, 2 and 3) 0.019 tn of CO2e per buyer (Scopes 1, 2 and 3) |
Carbon Footprint Management – Our Environmental Impact Strategy Energy Efficiency and migration of our operations to renewable energies ■ Smart metering strategy that allows us to remotely monitor our consumption through the use of smart sensors and real-time dashboards. ■ Seven buildings with smart metering in Argentina, Brazil and Mexico, where we have implemented sensors with IoT technology with very positive results and reduction opportunities of up to 10%. ■ Began the process of migrating 100% of our operations to renewable energy sources. ■ Since November 2020, Melicidade is powered by 100% renewable energy. ■ Our SP02 distribution center is the first logistics operation in the region to run on 100% renewable energy. ■ 7,061MWh consumption of renewable energy generated off-site. Sustainable Mobility Reducing the impact of our |
|
|
|
| | | 100% We began the process of migrating 100% of our operations to renewable energy sources 100% Our SP02 distribution center is the first logistics operation in the region to run on 100% renewable energy 1.85M Packages delivered with electric mobility solutions/fleet |
| | MercadoLibre 2022 Proxy Statement | | | 11 | | |
Impact Highlights | | |
Regeneration Regeneration and conservation of the region’s emblematic natural ecosystems. In March 2021, we launched “Regenerate America,” a program that seeks to contribute to the To develop the program, we made an initial investment of USD 7.8 million, distributed among the Mantiqueira Conservation Project and the Corridors for Life, both located in We focused on Latin America because it is home to around 40% of the planet’s biodiversity. We started with the Atlantic Forest because it is one of the most threatened ecosystems in the region, known for its important watersheds, and | | | $7.8M Initially invested to develop “Regenerate America” |
| | 12 | | | MercadoLibre 2022 Proxy Statement | | |
Impact Highlights | | |
| | Human Capital |
Talent, Culture and Development To be leaders in Latin America, we believe we attract, engage and develop the best talent by offering a transformative experience, co-creating the best place to work and ensuring our “DNA” (or our culture) is present in every corner of our We believe that being part of MercadoLibre is an experience that is always dynamic, collaborative, inspiring and full of opportunities. Our employee value proposition is designed to be attractive to the profile of entrepreneurial talent and is aligned with our DNA. For this reason, it allows everyone at MercadoLibre to engage their experience in a unique way. We are still one of the 20 best places to work in the world and one of the top 5 in the region according to the Great Places to Work rankings. We are very proud to have been highlighted in these rankings as one of the top 3 employers in most of the countries in which we operate. | | | One of the 20 best places to work in the world according to Great Places to Work One of the top 5 best places to work in the region according to Great Places to Work |
| |
Recruitment and Hiring Our strategy with respect to recruitment and hiring is an example of our commitment to serve as a recovery engine for Latin America in response to the challenges presented in 2021. In connection with that goal, we designed an initiative that provides for the doubling of our workforce with a strategic focus on attracting the best local talent for our different business units. In addition, in light of the increasingly relevant societal role that we play as an organization, particularly in a region where economies are struggling to create new and more sources of employment, our strategy also aims to promote the creation of jobs through the opening of new centers in cities in which we operate. |
Well-Being |
Adapting to work environments during the COVID-19 pandemic has been a major focus of our people team’s programs, including taking care of the physical and emotional health of our team. |
During 2020 and 2021, we implemented programs designed to promote total emotional and physical wellness. For example, in 2021, we created an Emotional Health Mapping program, intended to support mental health. We also increased mindfulness, yoga, gym workouts and psychological assistance services for our team. We have scheduled and broadcasted talks with specialists in areas relating to wellbeing, such as learning circles on how to manage emotions, healthy sleep recommendations and resilience, among others. |
| | MercadoLibre 2022 Proxy Statement | | | 13 | | |
Impact Highlights | | |
|
Remote Work Environment Over half of the We redesigned our offices to adapt them to the hybrid model. We moved from open desks to “neighborhoods,” to have more spaces that promote collaboration and innovation. As always, we capitalized on bot technology to manage it better. | | | +50% of MercadoLibre employees have been working remotely since the beginning of the pandemic |
Diversity and Inclusion We innovate from a multiplicity of perspectives and that diversity is what makes us disruptive. We inspire people to unfold their capabilities and express themselves in a healthy and equitable environment, where previous beliefs do not condition acceptance and curiosity allows us to value differences. MercadoLibre’s Purpose of Diversity and Inclusion: ■ Build diverse teams, with focus on women, LGBT+ people, people with disabilities, and race and ethnicity. ■ Foster an inclusive culture, through the experience that each person lives at MercadoLibre. ■ Nurture IT talent, expanding access to technology education, with a focus on women. We focus on all employees living their MELI experience in an inclusive environment that challenges and inspires them, ensuring they feel comfortable expressing their diversity. We naturalize this message from a communication and employer branding strategy based on real cases, in their protagonists’ own words. | | | Diverse teams built with focus on women, LGBT+ people, people with disabilities, and race and ethnicity |
| |||
We put a lot of effort into the inclusion and development of women in our sector. In MercadoLibre, four out of ten employees are women and they occupy 32% of the leadership positions in Management, exceeding the average of the IT and Logistics market. The five-percentage point increase in this indicator over the last two years is the result of succession management and talent attraction at this level. In addition, we employed a total of 76 people with disabilities on the team during the year, which represents 1.3% of the people working at the company. Lastly, in Brazil, 38% of our employees identify themselves as black. | | | 76 Employees with disabilities |
| |||
At the same time, our Our affinity groups are based on Women, LGBT+, People with Disabilities, Race and Ethnicities. These teams volunteer their time to work on the design and implementation of proposals. In 2021, for example, the | | | 38% of employees in Brazil identify themselves as black |
| | 14 | | | MercadoLibre 2022 Proxy Statement | | |
Q:What are our board’s voting recommendations?
A: Our board recommends that you vote your shares:TABLE OF CONTENTS
Impact Highlights |
| |
|
| | Ethics and Transparency |
We act with integrity and transparency. | | | Our Values Honesty Fairness Respect Integrity |
That is why we demand that all the Our Code of Ethics aims to ensure that the values of honesty, fairness, respect, and integrity prevail in all third-party relationships and those of our employees, with the understanding that it is our obligation, as good corporate citizens, to comply with all applicable laws and avoid inappropriate actions or omissions, and conflicts of interest. In addition, our Code outlines our commitment to compliance with laws and regulations and good management practices for internal information, company assets, and digital media. Published on our Investor Relations site, the Code is publicly accessible. People working at MercadoLibre must sign it upon joining the company and suppliers and business partners must accept it upon joining our supply chain. In 2021, the Code was accepted by 6,670 suppliers. To ensure that all our |
|
| | ||
| |
|
|
5
|
|
Q:How many shares are entitled to vote?
A: Each share ofFurther, we have also published our common stock outstanding as of the close of business on April 15, 2019, the record date, is entitled to one vote at the 2019 Annual Meeting. Each share of our preferred stock outstanding as of the close of business on the record date is entitled to vote on par with shares of our common stock on an as-converted basis. At the close of business on April 15, 2019, 49,526,972 shares of our common stock were outstanding and entitled to vote (including shares of our Preferred Series A stock on an as-converted basis, assuming no adjustments to the conversion price between the record dateSustainability Bond report and the date of the Annual Meeting). You may vote all of the shares owned by you as of the close of businessTask Force on the record date and each share of common stock held by you on the record date represents one vote. These shares include shares thatClimate-Related Disclosures, which are (1) held of record directly in your name and (2) held for you as the beneficial owner through a stockbroker, bank or other nominee.
Q:What is the difference between holding shares as a stockholder of record and as a beneficial owner?
A: Most stockholders of MercadoLibre hold their shares beneficially through a stockbroker, bank or other nominee rather than directly in their own name. There are some distinctions between shares held of record and shares owned beneficially, specifically:
Shares held of record
If your shares are registered directly in your name with our transfer agent, Computershare, you are considered the stockholder of record with respect to those shares, and the Notice of Internet Availability was sent directly to you. As the stockholder of record, you have the right to grant your voting proxy directly to us. If you requested to receive printed proxy materials, we have enclosed or sent a proxy card for you to use. Each stockholder of record is entitled to vote by proxy as described in the Notice of Internet Availability and below.
Shares held in brokerage account or by a bank
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name, and the Notice of Internet Availability was forwarded to you by your broker or nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner or nominee, you have the right to direct your broker or other nominee on how to vote the shares in your account.
Q:Can I attend the 2019 Annual Meeting?
A: You are invited to participate in the 2019 Annual Meeting if you are a stockholder of record or a beneficial owner at the close of business on April 15, 2019. Any stockholder can attend the 2019 Annual Meeting via the Internet at www.virtualshareholdermeeting.com/MELI2019. We encourage you to access the Annual Meeting online prior to its start time. Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at http://investor.mercadolibre.com.
Q:How can I vote my shares?
A: Whether you hold shares directly as the stockholder of record or beneficially in street name, you may vote as follows:
|
|
|
|
Under Delaware law, votes cast by Internet or telephone have the same effect as votes cast by submitting a written proxy card.
6
Q:Can I change my vote or revoke my proxy?
A: If you are the stockholder of record, you may change your proxy instructions or revoke your proxy at any time before your proxy is voted at the 2019 Annual Meeting. Proxies may be revoked by any of the following actions:
|
|
|
|
|
|
If your shares are held through a brokerage account or by a bank or other nominee, you may change your vote by:
|
|
|
|
Q:How are votes counted?
A: Election of three Class III Directors. In the election of three Class III directors, you may vote “for” any or all of the nominees for Class III directors or you may “withhold” your vote with respect to any or all of the nominees for Class III director. Only votes “for” will be counted in determining whether a plurality has been cast in favor of a nominee for Class III director.
Advisory Vote to Approve our Named Executive Officers’ Compensation for 2018. In the approval, on an advisory basis, of the compensation of our named executive officers for fiscal year 2018, you may vote “for,” “against” or “abstain.” If you elect to abstain from voting, the abstention will have the same effect as a vote against this proposal.
Approval of the adoption of the Amended and Restated 2009 Plan. In the approval of the adoption of the Amended and Restated 2009 Plan, you may vote “for,” “against” or “abstain.” If you abstain from voting, it will have the same effect as a vote against this proposal.
Ratification of Appointment of Independent Auditor. In the proposal to ratify the appointment of our independent registered public accounting firm for 2019, you may vote “for,” “against” or “abstain.” If you abstain from voting, it will have the same effect as a vote against this proposal.
No cumulative voting rights are authorized, and dissenter’s rights are not applicable to these matters.
If you sign and return your proxy card or broker voting instruction card without giving specific voting instructions, your shares will be voted “FOR” the election of the three Class III directors nominated and recommended by our board and named in this proxy statement, “FOR” approval of our executive compensation, “FOR” the approval of the adoption of the Amended and Restated 2009 Plan, “FOR” the ratification of the approval of our independent auditors, and at the discretion of the proxies in any other matters properly brought before the 2019 Annual Meeting.
If you are a beneficial holder and do not return a voting instruction card, your broker is only authorized to vote on the ratification of the approval of our independent auditors. See “What are broker non-votes and what effect do they have on the proposals?”
Q:Who will count the votes?
A:A representative of Broadridge will tabulate the votes at the 2019 Annual Meeting and act as the inspector of elections.
Q:What is the quorum requirement for the 2019 Annual Meeting?
A:The quorum requirement for holding the 2019 Annual Meeting and transacting business is a majority of the outstanding shares entitled to vote. The shares may be present in person or represented by proxy at the 2019 Annual Meeting. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum.
7
Q:What is the voting requirement to approve each of the proposals?
A: Election of three Class III Directors. The Class III directors will be elected by a plurality of the votes of the shares present in person or by means of remote communication or represented by proxy and entitled to vote on the matter, meaning that the three Class III director nominees receiving the highest number of “FOR” votes will be elected.
Advisory Vote to Approve our Named Executive Officers’ Executive Compensation for 2018. The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the matter is required to approve our named executive officers’ compensation for fiscal year 2018. This vote is advisory and will not be binding on the company, the board of directors or the compensation committee.
Adoption of the Amended and Restated 2009 Plan. The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the matter is required to adopt our Amended and Restated 2009 Equity Compensation Plan.
Ratification of Appointment of Independent Auditor. The vote of a majority of the shares present in person or represented by proxy is required to ratify the appointment of our independent registered public accounting firm for 2019.
Q: What are broker non-votes and what effect do they have on the proposals?
A: Generally, broker non-votes occur when shares held by a broker, bank or other nominee in “street name” for a beneficial owner are not voted with respect to a particular proposal because (1) the broker, bank or other nominee has not received voting instructions from the beneficial owner and (2) the broker, bank or other nominee lacks discretionary voting power to vote those shares. A broker, bank or other nominee is entitled to vote shares held for a beneficial owner on “routine” matters without instructions from the beneficial owner of those shares, but is not entitled to vote shares held for a beneficial owner on any non-routine matter without instruction from the beneficial owner. The ratification of the appointment of our independent registered public accounting firm is considered to be a routine matter for which brokers, banks or other nominees holding shares in street name may exercise discretionary voting power in the absence of voting instructions from the beneficial owner. As a result, broker non-votes will not arise in connection with, and thus will have no effect on, this proposal.
Unlike the proposal to ratify the appointment of our independent auditors, the election of directors, the advisory vote on our named executive officers’ compensation for fiscal year 2018, and the adoption of our Amended and Restated 2009 Plan are each considered a “non-routine” matter. As a result, brokers, banks or other nominees holding shares in street name that have not received voting instructions from their clients cannot vote on their clients’ behalf on these proposals. Therefore, it is very important that you provide your broker, bank or other nominee who is holding your shares in street name with voting instructions with respect to these proposals in one of the manners set forth in this proxy statement. Under Delaware law, broker non-votes that arise in connection with the election of directors or the advisory vote on our named executive officers’ compensation for fiscal year 2018 will have no effect on these proposals.
Q:Where can I find the voting results of the 2019 Annual Meeting?
A: We will announce final voting results in a current report on Form 8-K that will be filed with the SEC within four business days after the 2019 Annual Meeting and that will also beboth available on our investor relations website at http:website: https://investor.mercadolibre.com.
Q:investor.mercadolibre.com/corporate-social-responsibility.Who will bear the cost of soliciting votes for the 2019 Annual Meeting?
A: We will pay the entire cost of preparing, assembling, printing, mailing, and distributing these proxy materials. If you choose to access the proxy materials and/or vote over the Internet, you are responsible for any Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur. In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic communication by our directors, officers and employees, who will not receive any additional compensation for such solicitation activities.
8
| | MercadoLibre 2022 Proxy Statement | | | 15 | | |
TABLE OF CONTENTSCONTENTS
9
Our certificate of incorporation provides for our board to be divided into three classes, with each class having a three-year term. In accordance with our certificate of incorporation and bylaws, the number of directors that constitutes our board of directors is fixed from time to time by a resolution duly adopted by our board. Our board currently consists of nine members. Information as to the directors currently comprising each class of directors and the current term expiration date of each class of directors is set forth in the following table:
| |||||||||
Directors Comprising Class | | | Class | | | Current Term Expiration Date | | ||
| Susan Segal Mario Eduardo Vázquez Alejandro Nicolás Aguzin | |
| Class I | | | 2023 Annual Meeting | | |
| Nicolás Galperin Henrique Dubugras Richard Sanders(1) | | | Class II | | | 2024 Annual Meeting(1) | | |
|
|
| |||||||
| Emiliano Calemzuk Marcos Galperin Roberto Balls Sallouti | |
| Class III | | | 2022 Annual Meeting | |
1. On February 9, 2022, our board upon the recommendation of the nominating and corporate governance committee, pursuant to the Company’s Certificate of Incorporation and bylaws, approved a resolution increasing the size of the board from eight to nine directors. Concurrently, the board unanimously approved the appointment of Mr. Richard Sanders as a Class II director of the Company (in order to maintain the number of directors in each of the three classes of directors as nearly equal in number as possible), to serve from February 9, 2022 until the Company’s 2022 Annual Meeting of Stockholders or until his successor is duly elected and qualified or until his earlier death, resignation or removal. Therefore, the term of office of Mr. Sanders is scheduled to expire at the 2022 Annual Meeting. A director elected to fill a vacancy (including a vacancy created by an increase in the size of our board) will serve for the remainder of the term of the class of directors in which the vacancy occurred and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal. As discussed in greater detail below in “Information on our Board of Directors—Directors and Corporate Governance — Director Independence and Family Relationships,”Relationships” our board has determined that seven of the nine current members of our board are independent directors within the meaning of the listing standards of The NASDAQ Global Select Market (the “NASDAQ”“NASDAQ”) and our corporate governance guidelines.The terms of our three Class III directors are set to expire at the 2019 Annual Meeting. The nominating and corporate governance committee recommended, and our board nominated, each of Emiliano Calemzuk, Marcos Galperin and Roberto Balls SalloutiRichard Sanders as nomineesnominee for re-electionelection as a Class III directorsII director of our Company at the 20192022 Annual Meeting. If elected at the 20192022 Annual Meeting, each of the Class III director nomineesMr. Sanders will serve until our 20222024 Annual Meeting of Stockholders and until his successor is duly elected and qualified, or until his earlier death, resignation or removal.Further, the terms of our three Class III directors are set to expire at the 2022 Annual Meeting. The nominating and corporate governance committee recommended, and our board nominated, (i) Emiliano Calemzuk and Marcos Galperin as nominees for re-election, and Andrea Petroni as a nominee for election, as Class III directors of our Company at the 2022 Annual Meeting. Mr. Balls Sallouti has chosen to not run for re-election to serve on the Board of Directors. Mr. Sallouti is relinquishing his position at the end of his current term, which coincides with the date of the Annual Meeting. Mr. Sallouti has served on the Board of Directors since 2014, providing years of valuable contributions to the Company. Mr. Sallouti’s decision not to stand for re-election to the Board was not based on any disagreement with the Company with respect to any matter relating to the Company’s operations, policies or practices. If elected at the 2022 Annual Meeting, each of the Class III director nominees will serve until our 2025 Annual Meeting of Stockholders and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal.
| | 16 | | | MercadoLibre 2022 Proxy Statement | | |
Proposal I | | |
Nominees
Class III Directors
Emiliano Calemzuk, age 45, joined our board in August 2007, has served as chairman of the nominating and corporate governance committee since 2007 and has served as a member of the compensation committee since 2008. Mr. Calemzuk was appointed as our lead independent director in February 2016. Mr. Calemzuk is the CEO and co-founder of RAZE, a new media venture. Prior to that position, between 1998 and 2012 Mr Calemzuk had a successful career at News Corporation/Fox. He last served as CEO of Shine Group Americas (Unit of 21st Century Fox) from September 2010 to January 2012. From 2007 to 2010, Calemzuk served as President of Fox Television Studios. Prior to joining Fox Television Studios, Calemzuk was President of Fox International Channels Europe, based in Rome from 2002 to 2007. Before working in Italy, Calemzuk was based in Los Angeles where he served as Vice President and Deputy Managing Director of Fox Latin American Channels overseeing all operating divisions of Fox across 19 countries. Born in 1973 in Mar del Plata, Argentina, Calemzuk is a Cum Laude graduate of the University of Pennsylvania.
10
Key Attributes, Experience and Skills:
Mr. Calemzuk contributes significant leadership experience in media, marketing and promotions. His service as President of Fox Television Studios provides valuable business, leadership and management experience, including expertise leading a large organization with global operations, giving him a keen understanding of the issues facing a multinational business such as MercadoLibre. Similarly, he has led the growth of international operations of Fox in both Latin America and Italy. In particular, he is a leader in alternative entertainment and technology genres, uniquely positioning him to provide thought leadership and guidance as MercadoLibre adapts to a changing technology and entertainment world. Mr. Calemzuk is a Latin American who currently works for a major corporation in the United States, bringing insights from both cultures to our board.
Marcos Galperin, age 48, is one of our co-founders and has served as our chairman, president and chief executive officer and one of our directors since our inception in October 1999. Mr. Galperin serves on the boards of Endeavor, a non-profit organization that selects mentors and accelerates high impact entrepreneurs around the world; Televisa, a media company in Mexico; Onapsis, a cyber-security company; and Globant S.A. (NYSE: GLOB), a technology service provider focused on delivering software solutions by leveraging emerging technologies and trends that is listed on the NYSE, where he also serves as a member of the Compensation and Corporate Governance and Nominating Committees. Prior to working with us, Mr. Galperin worked in the fixed income department of J.P. Morgan Securities Inc. in New York from June to August 1998 and at YPF S.A., an integrated oil company, in Buenos Aires, Argentina, where he was a Futures and Options Associate and managed YPF’s currency and oil derivatives program from 1994 to 1997. Mr. Galperin received an MBA from Stanford University and graduated with honors from the Wharton School of the University of Pennsylvania. Mr. Galperin is the brother of Nicolás Galperin, a Class II Director.
Key Attributes, Experience and Skills:
Mr. Galperin brings leadership and extensive experience and knowledge of our company and industry to the board. As the founder, chief executive officer and president of our company, Mr. Galperin has the most long-term and valuable hands-on knowledge of the issues, opportunities and challenges facing us and our business. In addition, Mr. Galperin brings his broad strategic vision for our company to the board. Mr. Galperin’s service as our chairman, president and chief executive officer provides a critical link between management and the board, enabling the board to perform its oversight function with the benefits of management’s perspectives on the business.
Roberto Balls Sallouti, 47, has served as a member of the board of directors since October 2014. Roberto Sallouti is the Chief Executive Officer and a member of the Board of Directors of BTG Pactual, a Brazilian financial company operating in investment banking and global wealth and asset management markets in Latin America. Mr. Sallouti joined BTG Pactual in 1994, and became a partner in 1998. He was named Chief Operating Officer in 2008, having previously been responsible for the firm’s Fixed Income Division and joint head of the Latin American FICC group at UBS AG. He was named Chief Executive Officer in 2015. In 2008, he co-founded BTG Investments, which acquired Banco Pactual back from UBS in 2009. Mr. Sallouti holds a bachelor of science degree in economics, with concentrations in finance and marketing, from The Wharton School at the University of Pennsylvania.
Key Attributes, Experience and Skills:
Mr. Sallouti brings a deep understanding of financial markets, investment banking activities, accounting and business management. He also has more than 15 years of experience in the implementation, management and improvement of background and support structures in financial institutions. Our board believes that his knowledge of Brazilian and Latin American economies and markets, coupled with the professional network that he has developed in Latin America throughout his career in investment banking, makes him an asset to our company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTIONOF THE NOMINEES FOR CLASS III DIRECTORS NAMED ABOVE
11
INFORMATION ON OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Our business is managed by our employees under the direction and oversight of our board. Except for our chief executive officer, none of the members of our board is an employee of MercadoLibre. Our board members remain informed of our business through discussions with management, materials we provide to them, and their participation on the board and in board committee meetings.
We believe open, effective, and accountable corporate governance practices are key to our relationship with our stockholders. Our board has adopted corporate governance guidelines that, along with the charters of our board committees and our code of business conduct and ethics, provide the framework for the governance of our company. A complete copy of our corporate governance guidelines, the charters of our board committees, and our code of business conduct and ethics may be found on our investor relations website at http://investor.mercadolibre.com. Information contained on or connected to our website is not part of this proxy statement. The board regularly reviews corporate governance developments and modifies these policies as warranted. Any changes in these governance documents will be reflected on the same location of our website.
Board of Directors
The following is biographical information on the remainder of our continuing directors, as well as the key attributes, experience and skills that the board believes such continuing directors bring to the board.
Susan Segal, 66, joined our board in April 2012 and has served as a member of the audit committee since 2012. Ms. Segal has been president and chief executive officer of the Americas Society and Council of the Americas since August 2003, after having worked in the private sector for more than 30 years. Prior to her current position, Ms. Segal was a founding partner of her own investment advisory firm focused primarily on Latin America and the U.S. Hispanic market. Previously, she was a partner and Latin American Group Head at JPMorgan Partners/Chase Capital Partners, where she pioneered early stage venture capital investing in Latin America. Prior to joining Chase Capital Partners, Ms. Segal was a senior managing director focused on Emerging Markets Investment Banking and Capital Markets at Chase Bank and its predecessor banks. She was actively involved in developing investment banking, building an emerging-market bond-trading unit for Latin America and was also involved in the Latin American debt crisis of the 1980s and early 1990s both chairing and sitting on various advisory committees. Ms. Segal is on the Board of Directors of Scotiabank, where she serves as chairperson of the Corporate Governance Committee and member of the Risk Committee. Additionally, she is a director and chairperson of Scotiabank USA, a non-public subsidiary of Scotiabank. She also serves as a director of the Tinker Foundation and is a member of the Council of Foreign Relations. She is also a Board member of Vista Oil and Gas. In 1999, she was awarded the Order of Bernardo O’Higgins Grado de Gran Oficial in Chile and in 2009 President Uribe of Colombia honored her with the Cruz de San Carlos. In 2012, she was awarded the Order of the Mexican Aztec Eagle in Mexico and in 2019 she was awarded Peru’s Order of “Merit for Distinguished Services” in the rank of Grand Official. Ms. Segal received a master’s in business administration from Columbia University and a bachelor’s degree from Sarah Lawrence College. Ms. Segal previously served as a director of our company from 1999 to 2002.
Key Attributes, Experience and Skills:
Ms. Segal’s impressive experience includes her background studying the economies of Latin American countries. She is also well-versed in Latin America’s prospects for growth, integration, and economic and social development, and she is knowledgeable about economic inclusion, social empowerment, markets, overall business environment, diversity issues and risk assessment. Her background includes experience in trade, private equity, venture capital, social media, and infrastructure. Ms. Segal’s decades of experience in Latin America have enabled her to create an extensive network among Latin America’s political and business leaders. Given the increasing political and other challenges involved with doing business across national borders in Latin America, the board believes that Ms. Segal’s prior experience and extensive knowledge of these affairs qualify her to serve as a director of our company.
Mario Eduardo Vázquez, age 83, joined our board in May 2008, has served as chairman of the audit committee since May 2008 and has served as a member of the nominating and corporate governance committee since March 2009. He is also a member of the compensation committee. Mr. Vázquez serves as a member of the board of directors and as the president of the audit committee of Globant S.A. (NYSE: GLOB) and Despegar.com, Corp, and as President of the compensation committee and corporate governance and nominating committee of Globant S.A. Mr. Vázquez served as the chief executive officer of Grupo Telefónica in Argentina from June 2003 to November 2006, and served as a member of the board of directors of Telefónica S.A. Spain from November 2000 to November 2006. He has also served as a regular member of the board of directors of Telefónica Argentina S.A. and Telefónica Holding Argentina S.A., and as alternate member of the board of directors of Telefónica de Chile S.A until 2012. Mr. Vázquez served as a member of the board of directors of YPF S.A. and as the president of the Audit Committee of YPF S.A until 2012. Since November 2006, Mr. Vázquez has pursued personal interests in addition to his service as a director. Mr. Vázquez spent 23 years as a partner and general director of Arthur Andersen for Argentina, Chile, Uruguay and Paraguay (Pistrelli, Diaz y Asociados and Andersen Consulting—Accenture), where he served for a total of 33 years until his retirement in 1993. Mr. Vázquez previously taught as a professor of Auditing at the Economics School of the University of Buenos Aires. Mr. Vázquez received a degree in accounting from the University of Buenos Aires.
12
Key Attributes, Experience and Skills:
Mr. Vázquez was chosen to join our board specifically to serve our audit committee as its audit committee financial expert. We targeted a director with financial and auditing experience specific to Latin American businesses. Mr. Vázquez worked in auditing for Arthur Andersen for 33 years total, including 23 years as a partner and general director, in many of our markets, including Argentina, Chile, Uruguay and Paraguay. He also brings an academic perspective to the position from his time as a professor of Auditing at the Economics School of the University of Buenos Aires. Finally, Mr. Vázquez has employed these skills as a board member of several other technology and other companies, thus has important experience serving as a director and audit committee member.
Alejandro Nicolás Aguzin, aged 50, joined our Board in January 2017 and has served as a member of the nominating and corporate governance committee since February 2018. Mr. Aguzin is the Chairman and CEO of J.P. Morgan Asia Pacific, overseeing the firm’s overall activities across Asia Pacific, as well as CEO of International Private Bank, J.P. Morgan. He chairs the Asia Pacific Management Committee, and is also a member of J.P. Morgan’s firmwide Corporate & Investment Bank Management Committee. Mr. Aguzin was previously the CEO for J.P. Morgan Latin America, responsible for overseeing all of J.P. Morgan’s activities in Latin America. He was also the Head of Investment Banking Coverage, Mergers & Acquisitions and Capital Markets in the region. He joined J.P. Morgan in 1990 in Buenos Aires as a financial analyst in the Credit Group and has spent his career advising clients on strategic and corporate finance transactions. In 1991, he moved to New York, where he worked in the Corporate Finance Services Group and focused primarily on cross-border mergers and acquisitions for U.S. clients. In 1992, he returned to Buenos Aires in the Investment Banking team where he participated in several privatizations, capital markets and advisory transactions. In 1996, he moved to the Latin America Mergers & Acquisitions Group in New York, being appointed head of the group in 2000. In 2002, he expanded his responsibilities and was appointed head of Latin America Investment Banking Coverage, Mergers & Acquisitions and Capital Markets, formerly known as Latin America Investment Banking. In 2005, he was appointed CEO for Latin America. During 2008 and 2009, in addition to his responsibilities as CEO for Latin America and head of Latin America Investment Banking, Mr. Aguzin served as Senior Country Officer for Brazil. He holds a bachelor degree in Economics from the Wharton School of the University of Pennsylvania and is fluent in Spanish, Portuguese and English.
Key Attributes, Experience and Skills:
Mr. Aguzin brings a deep understanding of financial markets and investment banking activities which provide valuable business experience and critical insights on the roles of finance and strategic transactions in our business. Our board believes that his knowledge of the Latin American and Asian economies and markets, coupled with the professional network that he has developed in those regions throughout his career in investment banking, makes him an asset to our company.
Class II Directors
Nicolás Galperin, 50, joined our board in 1999. Mr. Galperin worked at Morgan Stanley & Co. Incorporated, an investment bank, from 1994 to 2006, and his last position was managing director and head of trading and risk management for the London emerging markets trading desk, as well as a trader of high-yield bonds, emerging markets bonds and derivatives in New York and London. Mr. Galperin founded Onslow Capital Management Limited, an investment management company that was based in London, in 2006, and worked at the company until its closure in 2018. Mr. Galperin is now an investor based in London. Mr. Galperin graduated with honors from the Wharton School of the University of Pennsylvania. Mr. Galperin is the brother of Marcos Galperin, our chairman, president, chief executive officer and Class III Director nominee.
Key Attributes, Experience and Skills:
Mr. Galperin’s career in investment banking and investment management, including serving in various leadership roles at Morgan Stanley and Onslow Capital Management, provide valuable business experience and critical insights on the roles of finance and strategic transactions in our business. His particular focus on emerging capital markets and his leadership in risk management contribute key skills to our board. Based in London, Mr. Galperin brings experience with both Latin American and European businesses. In addition to this global business perspective, Mr. Galperin’s extensive experience in banking and investments includes an understanding of financial statements, corporate finance, accounting and capital markets and fixed income products and derivatives.
Meyer “Micky” Malka Rais, 44, joined our board in March 2013 and has served as chairman of the compensation committee and as a member of the audit committee since then. Mr. Malka is the managing partner and founder of Ribbit Capital LP, a venture capital fund focused on investing in innovative companies in the financial services sector, a position he has held since May 2012. Mr. Malka has more than twenty years of experience building and investing in technology and financial services across three continents. Mr. Malka currently serves on the boards of several companies, including Credit Karma, Inc., a free credit and financial management platform; LendingHome Corporation, the largest online marketplace for home mortgages; Invoice2go, Inc., which offers invoicing solutions to small businesses on mobile applications; and Brex, Inc., a payments company offering the first corporate credit card for startups, among others. In 1991, at the age of 18, Mr. Malka co-founded Heptagon Group, a securities and investment broker dealer servicing the
13
Venezuelan and U.S. markets, where he served as chief operating officer. In 1998, Mr. Malka developed the online brokerage Patagon.com, Inc., which became Latin America’s first comprehensive Internet-based financial services portal and dealer until its acquisition in March 2000 by the Spanish bank Banco Santander. In 2003, he co-founded Banco Lemon, a Brazilian retail bank serving the underbanked population, which went on to become one of the largest private microfinance institutions in Brazil until 2009 when it was acquired by Banco do Brasil, Latin America’s largest bank. In July 2008, Mr. Malka co-founded and was co-chief executive officer of Bling Nation Ltd., a Palo Alto-based mobile payments private company, until July 2011 when it evolved into Lemon Inc, which was then acquired by LifeLock in 2013. In May 2011, Mr. Malka co-founded Banco Bracce, a Brazilian financial banking institution specializing in lending for mid-sized companies in Brazil. Banco Bracce was sold in 2014. Mr. Malka graduated with a degree in economics from the Universidad Católica Andrés Bello in Caracas, Venezuela in 1996 and currently resides in Palo Alto, California.
Key Attributes, Experience and Skills:
Mr. Malka is an entrepreneur who brings deep industry expertise and expansive operational experience to our board. He has spent his career in the financial products and payments industries, and he has gained deep understanding of the transformative role that technology can play in these industries. From co-founding one of the earliest online brokerages in Latin America to creating a microfinance bank with thousands of branches throughout Brazil, to co-founding one of the earliest mobile payments companies in the United States, Mr. Malka has been at the forefront of bringing fundamentally transformative technologies to financial services. Serving as both an executive and a board member at companies of all stages of growth, he understands how to manage the transition from a rapidly growing start-up to a successful public company, while preserving the entrepreneurial spirit necessary to continually innovate. His deep industry expertise and diverse professional experiences give him critical business insights into the challenges and opportunities presented to our business.
Javier Olivan, 41, joined our board in December 2012. Mr. Olivan is the Vice President of Central Product Services at Facebook, Inc. (NYSE: FB). Since 2007, Mr. Olivan has been responsible for Facebook’s international efforts, setting strategy and driving the growth of their global user base through product, marketing and internationalization initiatives. Among other teams, Mr. Olivan also oversees all ads products, integrity products, social good products, growth analytics, growth marketing and data science efforts. He is also working closely with Facebook’s Internet.org initiative, working with mobile operators to accelerate the adoption of the internet around the world. Prior to working at Facebook, Inc., Mr. Olivan was a product manager at Siemens Mobile where he led a cross-functional team charged with the development and market launch of handset devices. Earlier in his career, Mr. Olivan worked for NTT Corporation in Japan as a research and development engineer and was responsible for developing software that enabled high-quality wireless video transmission to mobile devices. Mr. Olivan holds a master’s degree in business administration from Stanford University and master’s degrees in both electrical and industrial engineering from the University of Navarra.
Key Attributes, Experience and Skills:
Mr. Olivan contributes extensive knowledge in creating and growing internet usage across the globe and over various platforms (web and mobile). He also has a deep understanding of how social networks work, which uniquely positions him to provide thoughtful counsel to us as we explore opportunities at the intersection of commerce and social media.
Director Independence and Family Relationships
NASDAQ rules require listed companies to have a board of directors with at least a majority of independent directors. Under NASDAQ’s rules, in order for a director to be deemed independent, our board must determine that the individual does not have a relationship that would interfere with the director’s exercise of independent judgment in carrying out his or her responsibilities as a director of our company. As part of our corporate governance guidelines, our board has adopted guidelines setting forth categories of relationships that it has deemed material for purposes of making a determination regarding a director’s independence. On an annual basis, each member of our board is required to complete a questionnaire designed to provide information to assist our board in determining whether the director is independent under NASDAQ rules and our corporate governance guidelines. Our board has determined that each of Messrs. Calemzuk, Malka, Olivan, Vázquez, Sallouti, Aguzin and Ms. Segal, is independent under the listing standards of NASDAQ and our corporate governance guidelines. Our governance guidelines require any director who has previously been determined to be independent to inform the chairman of our board and our corporate secretary of any change in circumstance that may cause his or her status as an independent director to change.
Other than our chief executive officer and Mr. Nicolás Galperin, who are brothers, there are no family relationships among our officers and directors, nor are there any arrangements or understandings between any of our directors or officers or any other person pursuant to which any officer or director was or is to be selected as an officer or director.
14
Board Leadership Structure
We do not have a fixed policy with respect to the separation of the offices of the chairman of the board and chief executive officer and believe that any determination in this regard is part of the executive succession planning process. The board understands that there is no single, generally accepted approach to providing board leadership and, in light of the competitive and dynamic environment in which we operate, the appropriate board leadership structure may vary from time to time as circumstances warrant.
Mr. Galperin currently serves as both our chairman and our president and chief executive officer. Our board believes service in these dual roles is in the best interests of our company and our stockholders. Mr. Galperin co-founded our company, has served as chief executive officer since our inception and is the only member of management on the board. The board is confident that he possesses the most thorough knowledge of the issues, opportunities and challenges facing us and our business and, accordingly, is the person best positioned to develop agendas that ensure that the board’s time and attention are focused on the most critical matters. His combined role enables decisive leadership, ensures clear accountability, and enhances our ability to communicate our message and strategy clearly and consistently to our stockholders, employees and users.
Because the board also believes that strong, independent board leadership is a critical aspect of effective corporate governance, the board has established the position of lead independent director. The lead independent director is an independent director elected annually by the board. Mr. Calemzuk currently serves as the lead independent director, a position to which he was appointed in February 2016. As lead independent director, he chairs and has authority to call formal closed sessions of the independent directors, leads board meetings in the absence of the chairman, and leads the annual board self-assessment process. In addition, the lead independent director, together with the chair of the nominating and corporate governance committee, conducts interviews to confirm the continued qualification and willingness to serve of each director whose term is expiring at an annual meeting prior to the time at which directors are nominated for re-election.
Our board will continually evaluate the current leadership structure of the board with the goal of maximizing its effectiveness.
Our board of directors provides various forms of risk oversight. As part of this process, the board seeks to identify, prioritize, source, manage and monitor our critical risks. To this end, our board periodically, and at least annually, reviews the material risks faced by us, our risk management processes and systems and the adequacy of our policies and procedures designed to respond to and mitigate these risks.
The board has generally retained the primary risk oversight function and has an active role, in its entirety and also at the committee level, in overseeing management of our material risks. The board regularly reviews information regarding our operations, strategic plans and liquidity, as well as the risks associated with each. The audit committee oversees management of financial and internal control risks as well as the risks associated with related party transactions. Our head of internal audit reports directly to the audit committee. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The nominating and corporate governance committee oversees the management of risks associated with the composition and independence of our board and oversees our corporate governance policies and procedures related to risk management, including our whistleblower procedures, insider trading policy and corporate governance guidelines. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire board of directors is regularly informed through committee reports about such risks.
Stockholder Communications with our Board
Stockholders may communicate with our board, board committees or individual directors, including the lead independent director, c/o Corporate Secretary, Arias 3751, 7th Floor, Buenos Aires, Argentina, C1430CRG. The nominating and corporate governance committee has delegated responsibility for initial review of stockholder communications to our manager of investor relations. In accordance with the committee’s instructions, our investor relations team will summarize all correspondence and make it available to each member of our board. In addition, the manager of investor relations will forward copies of all stockholder correspondence to each member of the nominating and corporate governance committee, except for communications that are (a) advertisements or promotional communications, (b) solely related to complaints by users with respect to ordinary course of business customer service and satisfaction issues, or (c) clearly unrelated to our business, industry, management, or board or committee matters.
We do not have a policy regarding director attendance at annual meetings of our stockholders. No members of our board of directors were able to attend our 2018 Annual Meeting of Stockholders in person.
15
Formal Closed Sessions
At the conclusion of each regularly scheduled board meeting, the independent directors have the opportunity to meet without our management or the other directors. The lead independent director leads these discussions.
Board compensation is determined by our board following a recommendation from our compensation committee. Only the directors who our board determines to be independent directors receive compensation for their service. Current board compensation is described under the heading “Director Compensation” below.
The board and each of its committees may retain outside advisors and consultants of their choosing at our expense. The board does not need to obtain management’s consent to retain outside advisors.
We expect our directors, executives and employees to conduct themselves with the highest degree of integrity, ethics and honesty. MercadoLibre’s credibility and reputation depend upon the good judgment, ethical standards and personal integrity of each director, executive, and employee. In order to better protect MercadoLibre and its stockholders, we periodically review our code of business conduct and ethics to ensure that it provides clear guidance to our employees and directors.
We believe it is important that our stockholders understand our governance practices. In order to help ensure the transparency of our practices, we have posted information regarding our corporate governance procedures on our investor relations website at http://investor.mercadolibre.com.
Board Effectiveness and Director Performance Reviews
It is important to us that our board and its committees are performing effectively and in the best interests of our company and our stockholders. The board and each committee performs an annual self-assessment to evaluate its effectiveness in fulfilling its obligations. As part of this annual self-assessment, directors are able to provide feedback on the performance of other directors. Our lead independent director follows up on this feedback and takes such further action with directors receiving comments and other directors as he deems appropriate.
The board recognizes the importance of effective executive leadership to MercadoLibre’s success, and meets to discuss executive succession planning at least annually. As part of this process, our board reviews the capabilities of our senior leadership as set out in written succession planning documents and identifies and discusses potential successors for members of our executive staff, including the chief executive officer. Our nominating and corporate governance committee leads the succession planning process for our chief executive officer and other senior officers and performs a similar analysis with respect to the rest of our board.
We have taken a number of steps to ensure the continued independence of our independent registered public accounting firm. Our independent registered public accounting firm reports directly to the audit committee, and we limit the use of our auditors for non-audit services. The fees for services provided by our auditors in 2018 and 2017 and our policy on pre-approval of non-audit services are described under the section below entitled “Proposal Four: Ratification of Independent Registered Public Accounting Firm.”
We have established a corporate telephone hotline and Internet site to allow any employee to confidentially and anonymously lodge a complaint about any accounting, internal control, auditing or other matter of concern.
16
Board Committees
Board committees help our board perform effectively and efficiently, but do not replace the oversight of our board as a whole. There are currently three principal standing board committees: the audit committee, the compensation committee and the nominating and corporate governance committee. Each committee meets regularly and has a written charter that has been approved by our board, which is available on our investor relations website at http://investor.mercadolibre.com. In addition, at each regularly scheduled board meeting, a member of each committee reports on any significant matters addressed by the committee subsequent to the board’s most recent prior meeting. Each committee performs an annual self-assessment to evaluate its effectiveness in fulfilling its obligations.
The following table lists the current members of each of our three principal standing board committees:
|
|
| ||||
|
|
| ||||
|
|
| ||||
|
| |||||
|
|
|
| |||
|
|
*Independent Director.
The audit committee, which met four times and took seven actions by unanimous written consent during fiscal year 2018, is comprised of Mr. Vázquez (Chairman), Mr. Malka and Ms. Segal. Our board has determined that each of the directors serving on our audit committee is independent as defined under the rules of the SEC and as defined in the Listing Rules of NASDAQ, and that Mr. Vázquez is an “audit committee financial expert,” as defined under the rules of the SEC. The audit committee is responsible for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information, please see “Audit Committee Report” beginning on page 39 of this proxy statement.
17
Compensation Committee
The compensation committee, which met twice and took one action by unanimous written consent during fiscal year 2018, is comprised of Messrs. Malka (Chairman), Calemzuk and Vazquez. Our board has determined that each of the directors serving on our compensation committee is independent as defined in the Listing Rules of NASDAQ. Pursuant to its charter, the compensation committee is responsible for:
|
|
|
|
|
|
|
|
|
|
|
|
Our board has adopted a written charter for our compensation committee, which is posted on our investor relations website at http://investor.mercadolibre.com.
Nominating and Corporate Governance Committee
The nominating and corporate governance committee, which met once during fiscal year 2018, is comprised of Messrs. Calemzuk (Chairman), Aguzin and Vázquez. Our board has determined that each of the directors serving on our nominating and corporate governance committee is independent as defined in the Listing Rules of NASDAQ. The nominating and corporate governance committee is responsible for:
|
|
|
|
|
|
|
|
|
|
Committee. Our board has adopted a written charter for our nominating and corporate governance committee, which is posted on our investor relations website at http://investor.mercadolibre.com. That charter requires the nominating and corporate governance committee to consider the desired composition of our board, including such factors as expertise and diversity, and our corporate governance guidelines provide that, in consideration of the composition of our board, diversity of backgrounds and expertise should be emphasized.
From time to time, our board may establish other committees as circumstances warrant. Those committees will have the authority and responsibility as delegated to them by our board.
Code of Business Conduct and Ethics
Our board has adopted a code of business conduct and ethics that applies to our officers, directors and employees. Among other matters, our code of business conduct and ethics is designed to deter wrongdoing and to promote:
|
|
|
|
|
|
|
|
|
|
18
Our audit committee must approve any waiver of the code of business conduct and ethics for our executive officers or directors, and any waiver shall be promptly disclosed. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to amendments to or waivers from any provision of the code of business conduct and ethics applicable to our chief executive officer and chief financial officer by posting the required information on our investor relations section of our website at http://investor.mercadolibre.com.
Nominating and Corporate Governance Committee. The nominating and corporate governance committee of our board performs the functions of a nominating committee. The nominating and corporate governance committee’s charter describes the committee’s responsibilities, including identifying, reviewing, evaluating and recommending director candidates for nomination by our board. Our corporate governance guidelines also contain information concerning the responsibilities of the nominating and corporate governance committee with respect to identifying and evaluating director candidates. Both documents are published on our investor relations website at http://investor.mercadolibre.cominvestor.mercadolibre.com..
| | MercadoLibre 2022 Proxy Statement | | | 17 | | |
Proposal I | | |
| | | Richard Sanders Career highlights: Mr. Sanders is a partner at Permira, a global private equity firm. Mr. Sanders is a member of Permira’s Executive Committee and Investment Committees for their Flagship and Growth Opportunities funds, the latter as Chairman, and is also the co-head of the technology sector investment team. Mr. Sanders joined Permira in 1999 and has spent most of his career based in London. He relocated to the United States of America between 2007 and 2011 to set up Permira’s office in Menlo Park, California. Mr. Sanders currently serves as a director of Allegro.eu (Poland's largest online marketplace). Prior to joining Permira, Mr. Sanders worked for Morgan Stanley in London in the M&A and High Yield Capital Markets divisions. Mr. Sanders holds an MA in Literae Humaniories (Classics) from Oxford University and an MBA from Stanford University where he was a Fulbright Scholar. Key Attributes and Skills: Innovation & Technology: Mr. Sanders has a vast experience with making investment decisions in technology and digital markets industries, and therefore brings a deep understanding of those industries. Industry Experience: His experience as director of Allegro.eu, which is the company that operates Poland’s leading e-commerce platform, provides an invaluable viewpoint and knowledge to our board when assessing matters related to our Company’s business and strategy and the challenges and opportunities that lie ahead. Private Equity: More than 20 years of experience at a global private equity firm. Finance: Mr. Sanders professional background has given him extensive financial and M&A transactional skills, as well as exposure to dealing with large institutional investors globally. Risk Oversight: Extensive experience as director of other companies in the oversight and management of risks. | |
| | 18 | | | MercadoLibre 2022 Proxy Statement | | |
Proposal I | | |
| | | Emiliano Calemzuk Career highlights: Mr. Calemzuk is the CEO of 890 Fifth Avenue Partners, a Special Purpose Acquisition Company focused on the Media and Entertainment space. Prior to that position, from 2017 to 2020, Mr. Calemzuk was CEO and co-founder of RAZE, a media venture focused on the Hispanic space. In 2015 and 2016 Mr. Calemzuk partnered with Time Inc., publisher of Time, Sports Illustrated, People and other major magazine titles to assist with Time Inc.’s entry into digital video. In 2013 and 2014, Mr. Calemzuk joined Silver Eagle Acquisition Company, as the target company’s Chief Executive Officer designate. Between 1998 and 2012 Mr. Calemzuk had a successful career at News Corporation/Fox. He last served as CEO of Shine Group Americas (Unit of 21st Century Fox) from September 2010 to January 2012. From 2007 to 2010, Calemzuk served as President of Fox Television Studios. Prior to joining Fox Television Studios, Calemzuk was President of Fox International Channels Europe, based in Rome from 2002 to 2007. Before working in Italy, Calemzuk was based in Los Angeles where he served as Vice President and Deputy Managing Director of Fox Latin American Channels overseeing all operating divisions of Fox across 19 countries. Born in 1973 in Mar del Plata, Argentina, Calemzuk is a Cum Laude graduate of the University of Pennsylvania. Key Attributes and Skills: Media & Entertainment: Significant leadership experience in media as CEO of 890 Fifth Avenue Partners, CEO and co-founder of RAZE and President of Fox Television Studios. Mr. Calemzuk is a leader in alternative entertainment and technology genres, uniquely positioning him to provide thoughtful leadership and guidance as MercadoLibre adapts to a changing technology and entertainment world. Marketing: Extensive marketing experience as CEO of 890 Fifth Avenue Partners, CEO and co-founder of RAZE and President of Fox Television Studios, marketing content to all Latin American audiences via traditional and digital programming. Management: Valuable business, leadership and management experience, including expertise leading a large organization with global operations such as Fox Television Studios, giving him a keen understanding of the issues facing a multinational business such as MercadoLibre. Latam Markets: Mr. Calemzuk has led the growth of international operations of Fox in both Latin America and Italy, which has provided him with a broad expertise and understanding of the Latin American markets. | |
| | MercadoLibre 2022 Proxy Statement | | | 19 | | |
Proposal I | | |
| | | Marcos Galperin Career highlights: Mr. Galperin serves on the boards of Onapsis, a cyber-security company and of Satellogic, a leading provider of high resolution satellite imagery. He also served as a director of Globant S.A. (NYSE: GLOB) until his resignation in April 2020 and of Televisa, a media company in Mexico, until his resignation in April 2021. Mr. Galperin is also a member of JP Morgan International Council and a special advisor in MELI Kaszek Pioneer Corporation (NASDAQ: MEKA). Prior to working with us, Mr. Galperin worked in the fixed income department of J.P. Morgan Securities Inc. in New York from June to August 1998 and at YPF S.A., an integrated oil company, in Buenos Aires, Argentina, where he was a Futures and Options Associate and managed YPF’s currency and oil derivatives program from 1994 to 1997. Mr. Galperin received an MBA from Stanford University and graduated with honors from the Wharton School of the University of Pennsylvania, with a Bachelor of Science in Economics. Mr. Galperin is the brother of Nicolás Galperin, a Class II Director. Key Attributes and Skills: Entrepreneurship: Mr. Galperin, as co-founder of MercadoLibre, brings to the board his entrepreneurial and innovation skills that he has honed throughout the years at our Company. Industry Experience: Mr. Galperin’s experience leading MercadoLibre’s growth since its inception enables him to provide a unique perspective to the board regarding the industries where the Company operates. Media & Entertainment:Mr. Galperin has cultivated valuable knowledge of branding strategy as the co-founder, chief executive officer and president of MercadoLibre. Management: As the co-founder, chief executive officer and president of our Company, Mr. Galperin has the most long-term and valuable hands-on knowledge of the issues, opportunities and challenges facing us and our business. He provides a critical link between management and the board, enabling the board to perform its oversight function with the benefits of management’s perspectives on the business. Latam Markets: As the co-founder of MercadoLibre, the largest online commerce ecosystem in Latin America with presence in 18 countries, Mr. Galperin has a deep understanding and broad expertise in the Latin American markets. | |
| | 20 | | | MercadoLibre 2022 Proxy Statement | | |
Proposal I | | |
| | | Andrea Mayumi Petroni Merhy Career highlights: Andrea Petroni is the Head of Business Advisory and Execution of JP Morgan Chase & Co., Hong Kong Office, responsible for overseeing the Business Selection and Risk Governance framework for Investment Banking Asia Pacific. Prior to that position, from 2016 to 2019, Ms. Petroni was the Head of Finance and Business Management for Banking and Wholesale Payments for Asia Pacific at JP Morgan Chase & Co., Hong Kong Office, responsible for business development, business management, internal financial reporting and controller functions, and from 2016 to 2021 she was a board member, non-executive director of JP Morgan Chase Bank (China) Company limited. She serves as a member of the board of directors of Globant S.A. (NYSE: GLOB). Ms. Petroni has a Bachelor’s degree in Business Administration from Escola de Administração de Empresas — Fundação Getulio Vargas. Key Attributes and Skills: Finance: Ms. Petroni’s experience in senior leadership positions at a global financial institution has given her a strong financial background and experience, which includes reviewing financial statements, interacting with auditors and assessing the financial and business performance of companies around the world. Risk Oversight: Ms. Petroni brings to the board valuable experience on risk oversight given her role of Head of Business Advisory and Execution of JP Morgan Chase & Co., Hong Kong Office. Banking: With over 6 years of experience as an active board member at a regulated financial institution in China, Ms. Petroni has a deep understanding of the banking business and financial markets. Corporate Governance: Extensive experience advising and overseeing corporate governance matters, which will be of great value for the Company in achieving our sustainable growth aspirations. Her extensive international experience, which has led her to build a broad network of relationships across different cultures and countries, brings a unique perspective to our board. | |
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE NOMINEES FOR CLASS II AND CLASS III DIRECTORS NAMED ABOVE. | |
| | MercadoLibre 2022 Proxy Statement | | | 21 | | |
| | 22 | | | MercadoLibre 2022 Proxy Statement | | |
Information on our Board of Directors and Corporate Governance | | |
| Board Diversity Matrix (As of April 27, 2022) | | |||||||||||||||
| ■ Total Number of Directors | | | | | | | 9 | | | | | | ||||
| | | Female | | | Male | | | | | Non-Binary | | | Did Not Disclose Gender | | ||
| Part I: Gender Identity: | | | | |||||||||||||
| Directors | | | 1 | | | 8 | | | | | — | | | — | | |
| Part II: Demographic Background | | | | |||||||||||||
| African American or Black | | | — | | | — | | | | | — | | | — | | |
| Alaskan Native or Native American | | | — | | | — | | | | | — | | | — | | |
| Asian | | | — | | | — | | | | | — | | | — | | |
| Hispanic or Latinx | | | — | | | 6 | | | | | — | | | — | | |
| Native Hawaiian or Pacific Islander White | | | — | | | — | | | | | — | | | — | | |
| White | | | 1 | | | 4 | | | | | | | | |||
| Two or More Races or Ethnicities | | | — | | | 2 | | | | | — | | | — | | |
| LGBTQ+ | | | | | | | — | | | | | | ||||
| Did Not Disclose Demographic Background | | | | | | | — | | | | | |
| | MercadoLibre 2022 Proxy Statement | | | 23 | | |
Information on our Board of Directors and Corporate Governance | | |
| | | Susan Segal Career Highlights: Ms. Segal has been president and chief executive officer of the Americas Society and Council of the Americas since August 2003, after having worked in the private sector for more than 30 years. Prior to her current position, Ms. Segal was a founding partner of her own investment advisory firm focused primarily on Latin America and the U.S. Hispanic market. Previously, she was a partner and Latin American Group Head at JPMorgan Partners/Chase Capital Partners, where she pioneered early stage venture capital investing in Latin America. Prior to joining Chase Capital Partners, Ms. Segal was a senior managing director focused on Emerging Markets Investment Banking and Capital Markets at Chase Bank and its predecessor banks. She was actively involved in developing investment banking, building an emerging-market bond-trading unit for Latin America and was also involved in the Latin American debt crisis of the 1980s and early 1990s both chairing and sitting on various advisory committees. Ms. Segal is on the Board of Directors of Scotiabank, where she serves on the Audit and Risk Committees. Additionally, she is a director and chairperson of Scotiabank USA, a non-public subsidiary of Scotiabank. She also serves as a director of the Tinker Foundation, the Bretton Woods Committee and is a member of the Council of Foreign Relations. She is also a Board member of Vista Oil and Gas, S.A.B. de C.V. and Ribbit Leap, Ltd. In 1999, she was awarded the Order of Bernardo O’Higgins Grado de Gran Oficial in Chile and in 2009 President Uribe of Colombia honored her with the Cruz de San Carlos and in April 2022, President Duque presented her with Order of Boyaca. In 2012, she was awarded the Order of the Mexican Aztec Eagle in Mexico and in 2019 she was awarded Peru’s Order of “Merit for Distinguished Services” in the rank of Grand Official. Ms. Segal received a master’s in business administration from Columbia University and a bachelor’s degree from Sarah Lawrence College. Ms. Segal previously served as a director of our Company from 1999 to 2002. Key Attributes and Skills: Entrepreneurship: Ms. Segal, as a founding partner of her own investment advisory firm focused primarily on Latin America and the U.S. Hispanic markets, brings her entrepreneurial skills to our board. Private Equity: Ms. Segal’s professional background includes vast experience in private equity and venture capital, with a particular focus in Latin America, which is of great value for our board. Finance: Her various senior leadership roles in the investment banking industry and as CEO of the AS/COA have given Ms. Segal a deep knowledge on, and a valuable perspective for our board when considering financial matters. Risk Oversight: Extensive experience as director of other companies in the oversight and management of risks. Latam Markets: Ms. Segal’s impressive experience includes her background studying the economies of Latin American countries. She is also well-versed in Latin America’s prospects for growth, integration, and economic and social development, and she is knowledgeable about economic inclusion, social empowerment, markets, overall business environment, diversity issues and risk assessment. Ms. Segal’s decades of experience in Latin America have enabled her to create an extensive network among Latin America’s political and business leaders. | |
| | 24 | | | MercadoLibre 2022 Proxy Statement | | |
Information on our Board of Directors and Corporate Governance | | |
| | | Mario Eduardo Vázquez Career highlights: Mr. Vázquez serves as a member of the board of directors and as the president of the audit committee of Despegar.com, Corp. He also served as a director, president of the audit committee and member of the compensation committee of Globant S.A. (NYSE: GLOB) until his resignation in April 2022. Mr. Vázquez served as the chief executive officer of Grupo Telefónica in Argentina from June 2003 to November 2006, and served as a member of the board of directors of Telefónica S.A. Spain from November 2000 to November 2006. He has also served as a regular member of the board of directors of Telefónica Argentina S.A. and Telefónica Holding Argentina S.A., and as alternate member of the board of directors of Telefónica de Chile S.A until 2012. Mr. Vázquez served as a member of the board of directors of YPF S.A. and as the president of the Audit Committee of YPF S.A until 2012. Since November 2006, Mr. Vázquez has pursued personal interests in addition to his service as a director. Mr. Vázquez spent 23 years as a partner and general director of Arthur Andersen for Argentina, Chile, Uruguay and Paraguay (Pistrelli, Diaz y Asociados and Andersen Consulting—Accenture), where he served for a total of 33 years until his retirement in 1993. Mr. Vázquez previously taught as a professor of Auditing at the Economics School of the University of Buenos Aires. Mr. Vázquez received a degree in accounting from the University of Buenos Aires. Key Attributes and Skills: Finance: Mr. Vázquez was chosen to join our board specifically to serve our audit committee as its audit committee financial expert. We targeted a director with financial and auditing experience specific to Latin American businesses. He also brings an academic perspective to the position from his time as a professor of Auditing at the Economics School of the University of Buenos Aires. Innovation & Technology: Extensive experience as a board member of several other technology and other companies, which provides a valuable perspective and insight to our board. Latam Markets: Mr. Vázquez has experience auditing for Arthur Andersen for 33 years total, including 23 years as a partner and general director, in many Latin American markets, including Argentina, Chile, Uruguay and Paraguay. | |
| | MercadoLibre 2022 Proxy Statement | | | 25 | | |
Information on our Board of Directors and Corporate Governance | | |
| | | Alejandro Nicolás Aguzin Career highlights: Mr. Aguzin is the Chief Executive Officer of the Hong Kong Stock Exchanges and Clearing Ltd. and a member of the Board of Directors. Prior to that position, from 2020 to May 2021, Mr. Aguzin served as the CEO of J.P. Morgan’s International Private Bank and a member of the Operating Committee for the firm’s Asset & Wealth Management business. Mr. Aguzin held leadership roles spanning lines of business and geographies during his more than 30 years with J.P. Morgan, including serving as Chairman and CEO for the Asia Pacific Region from 2012 to 2020, overseeing the firm’s overall activities across Asia Pacific. Prior to that position, he was CEO for J.P. Morgan Latin America, responsible for overseeing all of J.P. Morgan’ activities in Latin America. He was also the Head of Investment Banking Coverage, Mergers & Acquisitions and Capital Markets in the region. He joined J.P. Morgan in 1990 in Buenos Aires as a financial analyst in the Credit Group and has spent his career advising clients on strategic and corporate finance transactions. In 1991, he moved to New York, where he worked in the Corporate Finance Services Group and focused primarily on cross-border mergers and acquisitions for U.S. clients. In 1992, he returned to Buenos Aires in the Investment Banking team where he participated in several privatizations, capital markets and advisory transactions. In 1996, he moved to the Latin America Mergers & Acquisitions Group in New York, being appointed head of the group in 2000. In 2002, he expanded his responsibilities and was appointed head of Latin America Investment Banking Coverage, Mergers & Acquisitions and Capital Markets, formerly known as Latin America Investment Banking. In 2005, he was appointed CEO for Latin America. During 2008 and 2009, in addition to his responsibilities as CEO for Latin America and head of Latin America Investment Banking, Mr. Aguzin served as Senior Country Officer for Brazil. Mr. Aguzin is a member of the Board of Trustees of the Asia Society as well as the Eisenhower Fellowships. He is also a member of the Asia Pacific Council of the Nature Conservancy. He holds a Bachelor of Science degree in Economics from the Wharton School of the University of Pennsylvania and is fluent in Spanish, Portuguese and English. Key Attributes and Skills: Corporate Governance: As the frontline regulator of global companies listed in Hong Kong, Mr. Aguzin brings extensive knowledge relating to governance and regulatory best practices in public companies. Banking: Mr. Aguzin brings a deep understanding of investment banking activities that provides valuable business experience and critical insights on the roles of finance and strategic transactions in our business. Finance: Broad experience and vast knowledge on the international financial markets. Latam Markets: Our board believes that his knowledge of the Latin American and Asian economies and markets, coupled with the professional network that he has developed in those regions throughout his career in investment banking, makes him an asset to our Company. | |
| | 26 | | | MercadoLibre 2022 Proxy Statement | | |
Information on our Board of Directors and Corporate Governance | | |
| | | Henrique Dubugras Career highlights: Mr. Dubugras is the co-founder & co-CEO of Brex Inc. Brex Inc. is a company reimagining financial systems so every growing company can realize their full potential and take control of their spend and business as they scale. Prior to that position, Mr. Dubugras co-founded Pagar.me, an online payments company, EduqueMe, an educational crowdfunding company aimed at sponsoring Latin American students in United States colleges and Estudar nos EUA, a company aimed at disseminating information and opportunities related to studying abroad for both undergraduate and graduate level students. From September 2016 to March 2017 he studied computer science at Stanford University. Key Attributes and Skills: Finance: Mr. Dubugras brings a deep understanding of financial tools and services that provide critical insights to our business. Entrepreneurship: Mr. Dubugras’ experience with innovation in the startup space promises to introduce new and creative ideas for our growth and place in an evolving world. Industry Experience: Mr. Dubugras has a wealth of technical and non-technical expertise in the financial services business along with knowledge of various financial services ecosystems. Our board believes that his experience with online payment systems, coupled with his transnational professional network, make him an asset to our Company. | |
| | MercadoLibre 2022 Proxy Statement | | | 27 | | |
Information on our Board of Directors and Corporate Governance | | |
| | | Nicolás Galperin Career highlights: Mr. Galperin worked at Morgan Stanley & Co. Incorporated, an investment bank, from 1994 to 2006, and his last position was managing director and head of trading and risk management for the London emerging markets trading desk, as well as a trader of high yield bonds, emerging markets bonds and derivatives in New York and London. In 2006, Mr. Galperin founded Onslow Capital Management Limited, an investment management company that was based in London, and worked at the company until its closure in 2018. Mr. Galperin is now an investor based in London. He graduated with honors from the Wharton School of the University of Pennsylvania. Mr. Galperin is the brother of Marcos Galperin, our chairman, president and chief executive officer. Key Attributes and Skills: Entrepreneurship: Mr Galperin brings to the board his entrepreneurial experience the board as founder of Onslow Capital Management Limited, an investment management company that was based in London. Finance: Mr. Galperin’s career in investment banking and investment management, including serving in various leadership roles at Morgan Stanley and Onslow Capital Management, provides valuable business experience and critical insights on the roles of finance and strategic transactions in our business. Risk Oversight: Mr. Galperin’s particular focus on emerging capital markets throughout his career and his leadership in risk management contribute key skills to our board. Latam Markets: Mr. Galperin is based in London and has focused his investment banking and investment management career in emerging markets, which brings to our board valuable global business perspective and knowledge of both Latin American and European markets. Banking: Extensive experience in banking and investments, which resulted in an understanding of financial statements, corporate finance, accounting and capital markets and fixed income products and derivatives. | |
| | 28 | | | MercadoLibre 2022 Proxy Statement | | |
Information on our Board of Directors and Corporate Governance | | |
| | | Audit | | | Compensation | | | Nominating & Corporate Governance | | |
| Emiliano Calemzuk* | | | | | ■ | | | ■ | | |
| Susan Segal* | | | ■ | | | ■ | | | | |
| Mario Vázquez* | | | ■ | | | ■ | | | ■ | |
| Nicolás Aguzin* | | | ■ | | | | | ■ | |
| | MercadoLibre 2022 Proxy Statement | | | 29 | | |
Information on our Board of Directors and Corporate Governance | | |
| MEMBERS | | | | | RESPONSIBILITIES | | |
| Mario Vázquez (Chairman & Financial Expert) Nicolás Aguzin Susan Segal | | | | | ■ Reviewing the performance of our independent registered public accounting firm and making recommendations to our board regarding the appointment or termination of our independent registered public accounting firm; ■ Considering and approving, in advance, all audit and non-audit services to be performed by our independent registered public accounting firm; ■ Overseeing management’s establishment and maintenance of our accounting and financial reporting processes, including our internal controls and disclosure controls and procedures, and the audits of our financial statements; ■ Establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal control or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; ■ Investigating any matter brought to its attention within the scope of its duties and engaging independent counsel and other advisers as the audit committee deems necessary; ■ Determining compensation of the independent registered public accounting firm, compensation of advisors hired by the audit committee and ordinary administrative expenses; ■ Reviewing annual and quarterly financial statements prior to their release; ■ Preparing the report required by the rules and regulations of the SEC to be included in our annual proxy statement; ■ Reviewing and assessing the adequacy of the committee’s formal written charter on an annual basis; ■ Reviewing and discussing with management our major risk exposures, including financial, operational, privacy, security, cybersecurity, competition, legal and regulatory risks, and the steps we have taken to detect, monitor and actively manage such exposures; ■ Reviewing significant legal, compliance and regulatory matters that could have a material impact on our financial statements or our business, including material notices to or inquiries received from governmental agencies; ■ Receiving and considering the independent auditors’ comments as to controls, adequacy of staff, and management performance and procedures in connection with audit and financial controls; ■ Reviewing the experience and qualifications of senior members of the internal audit function on an annual basis, including the responsibilities, staffing, budget and quality control procedures of the internal audit function; and ■ Handling such other matters that are specifically delegated to the audit committee by our board from time to time. | | |
| INDEPENDENCE | | | | ||||
| 3 out of 3 | | | | ||||
| MEETINGS IN 2021 | | | | ||||
| 5 | | | | ||||
| ACTONS BY UNANIMOUS WRITTEN CONSENT | | | | ||||
| 10 | | | | ||||
| | | | |
| | 30 | | | MercadoLibre 2022 Proxy Statement | | |
Information on our Board of Directors and Corporate Governance | | |
| MEMBERS | | | | | RESPONSIBILITIES | | |
| Emiliano Calemzuk (Chairman) Mario Vázquez Susan Segal | | | | | ■ Recommending to our board for determination, the compensation and benefits of all of our executive officers and key employees; ■ Recommending to our board for determination, the compensation and benefits of non-employee directors; ■ Monitoring and reviewing our compensation and benefit plans to ensure that they meet corporate objectives; ■ Administering our stock plans and other incentive compensation plans and preparing recommendations and periodic reports to our board concerning these matters; ■ Preparing the report required by the rules and regulations of the SEC to be included in our annual proxy statement and assisting management in the preparation of the compensation discussion and analysis included in this proxy statement; and ■ Such other matters that are specifically delegated to the compensation committee by our board from time to time. | | |
| INDEPENDENCE | | | | ||||
| 3 out of 3 | | | | ||||
| MEETINGS IN 2021 | | | | ||||
| 2 | | | | ||||
| ACTONS BY UNANIMOUS WRITTEN CONSENT | | | | ||||
| 1 | | | | | |||
| | | | |
| | MercadoLibre 2022 Proxy Statement | | | 31 | | |
Information on our Board of Directors and Corporate Governance | | |
| MEMBERS | | | | | RESPONSIBILITIES | | |
| Emiliano Calemzuk (Chairman) Mario Vázquez Nicolás Aguzin | | | | | ■ Recommending to our board for selection, nominees for election to our board; ■ Making recommendations to our board regarding the size and composition of the board, committee structure and membership and retirement procedures affecting board members; ■ Monitoring our performance in meeting our obligations of fairness in internal and external matters and our principles of corporate governance; ■ Reviewing correspondence received from stockholders; and ■ Such other matters that are specifically delegated to the nominating and corporate governance committee by our board from time to time. | | |
| INDEPENDENCE | | | | ||||
| 3 out of 3 | | | | ||||
| MEETINGS IN 2021 | | | | ||||
| 3 | | | | ||||
| ACTONS BY UNANIMOUS WRITTEN CONSENT | | | | ||||
| 1 | | | | ||||
| | |
| | 32 | | | MercadoLibre 2022 Proxy Statement | | |
Information on our Board of Directors and Corporate Governance | | |
2021.
| | MercadoLibre 2022 Proxy Statement | | | 33 | | |
Information on our Board of Directors and Corporate Governance | | |
19
On August 2, 2016,6, 2019, our board, upon the recommendation of the compensation committee, adopted a director compensation program that setsset compensation for our independent directors for service during the period from June 2016 to June 2019.one year periods commencing at the Company’s annual shareholders’ meeting in 2019, 2020 and 2021. For 2018,2021, each independent director receivesreceived an annual cash retainer fee for board services comprisedand a grant of a non-adjustable board service award and an adjustable board service award.shares of restricted stock. The non-adjustable board service award consistscash retainer fee consisted of a fixed cash payment of $60,000.$72,000. The adjustable board service award consistsshares of restricted stock (“Shares”) had a fixed cash amountvalue equal to $120,000, based on the market value of $100,000 adjustedthe Company’s stock. The Shares are subject to reflectforfeiture and transfer restrictions until the date of the annual changeshareholders’ meeting taking place in the average closing trading priceyear after which the independent director received such Shares. Additional annual cash retainer fees were paid to each individual serving the Board in one of our stock.
the following capacities.
| Lead independent director | | | $30,000 | |
| Audit committee chair | | | $21,913 | |
| Compensation committee chair | | | $21,913 | |
| Nominating and corporate governance committee chair | | | $15,000 | |
Director Compensation for 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
| Fees Earned or Paid in Cash (1) |
|
| Non-Equity Incentive Plan Compensation (2) |
|
| Total |
Emiliano Calemzuk |
| $ | 81,913 |
| $ | 108,561 |
| $ | 190,474 |
Nicolás Galperin (3) |
|
| - |
|
| - |
|
| - |
Meyer Malka |
|
| 81,913 |
|
| 108,561 |
|
| 190,474 |
Javier Olivan |
|
| 60,000 |
|
| 108,561 |
|
| 168,561 |
Susan Segal |
|
| 60,000 |
|
| 108,561 |
|
| 168,561 |
Mario Eduardo Vázquez |
|
| 81,913 |
|
| 108,561 |
|
| 190,474 |
Roberto Balls Sallouti |
|
| 60,000 |
|
| 108,561 |
|
| 168,561 |
Alejandro Nicolás Aguzin |
|
| 60,000 |
|
| 108,561 |
|
| 168,561 |
Total |
| $ | 485,739 |
| $ | 759,927 |
| $ | 1,245,666 |
(1)The amounts in this column include all fees earned for calendar year 2018, as described above, and additional retainers for committee chairs and the lead independent director, with the chair of each of the audit committee, the compensation committee and the nominating and corporate governance committee and the lead independent director receiving an additional cash retainer in the amount of $21,913, $21,913, $7,304 and $14,609, respectively.
(2)The amounts in this column include the adjustable board service award earned under the 2017 Director Program for the period from January to June 2018. The adjustable board service award under the 2018 Director Program is not determinable until the date of the 2019 Annual Meeting of Stockholders, so it was calculated considering (a) the average closing sale price of our common stock on NASDAQ during the 30 trading day period preceding the 2018 year end divided by (b) the average closing sale price of our common stock on NASDAQ during the 30 trading day period preceding the 2018 Annual Meeting of Stockholders.
(3)2021. Mr. Nicolás Galperin is not an independent director and did not receive anyreceives no compensation for his servicesservice on ourthe board, in 2018 in accordance with our policy not to compensate non-independent directors.
| Name | | | Fees Earned or Paid in Cash(1) | | | Stock Awards(2) | | | Total | |
| Emiliano Calemzuk | | | $128,124 | | | $119,832 | | | $247,956 | |
| Meyer Malka(3) | | | 46,967 | | | 59,989 | | | 106,956 | |
| Henrique Dubugras(4) | | | 36,157 | | | 59,843 | | | 96,000 | |
| Susan Segal | | | 72,168 | | | 119,832 | | | 192,000 | |
| Mario Eduardo Vázquez | | | 94,081 | | | 119,832 | | | 213,913 | |
| Roberto Balls Sallouti | | | 72,168 | | | 119,832 | | | 192,000 | |
| Alejandro Nicolás Aguzin | | | 72,168 | | | 119,832 | | | 192,000 | |
| Total | | | $521,833 | | | $718,992 | | | $1,240,825 | |
1. | The amounts in this column include all fees earned for fiscal year 2021, as described above, and additional cash retainers for committee chairs and the lead independent director. As a result, the amounts include (i) the portion of the fees earned under the 2021 Director Compensation Program for the period June to December, 2021 and (ii) the portion of the fees earned under the 2020 Director Compensation Program for the period January to June, 2021. |
2. | The amounts in this column include the fair value at the grant dates for stock awards earned during the fiscal year 2021, calculated in accordance with FASB ASC Topic 718. Under the terms of the Director Compensation Program, fair value means (i) the closing price of the shares as listed on NASDAQ (or other national exchange on which such shares may be publicly traded) or (ii) in the absence of an established market for the shares, the fair market value determined in good faith by the Board or a committee appointed by the Board to administer the plan. |
3. | Mr. Malka relinquished his position at the end of his term, which coincided with the date of the 2021 Annual Meeting. |
4. | Mr. Henrique Dubugras was elected as a Class II director of our Company at the 2021 Annual Meeting. |
| | 34 | | | MercadoLibre 2022 Proxy Statement | | |
■ | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
■ | full, fair, accurate, timely and understandable disclosure in our SEC filings and other public communications; |
■ | compliance with applicable governmental laws, rules and regulations; |
■ | prompt internal reporting of violations of the code to appropriate persons identified in the code; and |
■ | accountability for adherence to the code. |
| | MercadoLibre 2022 Proxy Statement | | | 35 | | |
Additional Governance Matters | | |
| | 36 | | | MercadoLibre 2022 Proxy Statement | | |
| Name | | | Age | | | Position | |
| Marcos Galperin | | | 50 | | | Chairman of the Board, President and Chief Executive Officer | |
| Pedro Arnt | | | 48 | | | Executive Vice President and Chief Financial Officer | |
| Ariel Szarfsztejn | | | 40 | | | Executive Vice President - Commerce | |
| Osvaldo Giménez | | | 52 | | | Fintech President | |
| Daniel Rabinovich | | | 44 | | | Executive Vice President and Chief Operating Officer | |
| Marcelo Melamud | | | 51 | | | Senior Vice President and Chief Accounting Officer | |
| Juan Martín de la Serna | | | 55 | | | Executive Vice President - Corporate Affairs | |
| | | Pedro Arnt has served as our financial officer since June 1, 2011. Prior to his appointment as chief financial officer, Mr. Arnt served in various capacities since joining MercadoLibre in December 1999. He initially led the business development and marketing teams as vice president, and later managed our customer service operations. He then held the position of vice president of strategic planning, treasury and investor relations, actively participating in our transition from a private to a public company, and playing an important role in capital markets, corporate finance, strategic planning and treasury initiatives. Prior to joining MercadoLibre, Mr. Arnt worked for The Boston Consulting Group. Mr. Arnt also currently serves as a director of Allegro.eu (Poland’s largest online marketplace). He is a Brazilian citizen and holds a bachelor’s degree, magna cum laude, from Haverford College and a master’s degree from the University of Oxford. | |
| | MercadoLibre 2022 Proxy Statement | | | 37 | | |
Executive Officers | | |
| | | Osvaldo Giménez has been our Fintech President since August 2020. Prior to this appointment, he was responsible for MercadoPago operations, a position to which he was appointed in February 2004. Mr. Giménez joined MercadoLibre in January 2000 as country manager of Argentina and Chile. Before joining us, Mr. Giménez was an associate in Booz Allen and Hamilton and worked for Santander Investments in New York. Mr. Giménez received a master’s in business administration from Stanford University and graduated from Buenos Aires Technological Institute with a bachelor’s degree in industrial engineering. | |
| | | Daniel Rabinovich has been our Chief Operating Officer since August 2020. Prior to this appointment, from 2019 until August 2020, Mr. Rabinovich was our Chief Operating Officer (Product & Technology), and prior to that he served as our Chief Technology Officer, a position to which he was appointed in January 2011. Before his appointment as Chief Technology Officer, Mr. Rabinovich served as our vice president of product development since January 2009, having joined MercadoLibre in March 2000 as an application architect. Before joining us, he worked in the application architecture team at PeopleSoft. Mr. Rabinovich holds a master’s degree in Technological Services Management from the Universidad de San Andres and graduated with honors from the University of Buenos Aires with a degree in information systems. | |
| | | Marcelo Melamud is a senior vice president and has served as our chief accounting officer since August 2008. Prior to this appointment, Mr. Melamud served as our vice president— administration and control, a position to which was appointed in April 2008. From July 2004 through March 2008, he served as the director of finance of MDM Hotel Group, a developer, owner and operator of Marriott branded hotels in Miami, Florida. From July 1998 through July 2004, Mr. Melamud worked in various finance roles for Fidelity Investments, a provider of investment products and services. During his work at Fidelity Investments, Mr. Melamud served as the director of finance of the World Trade Center Boston/Seaport Hotel and he also served as the director of finance of MetroRed Telecom Group Ltd., a fiber-optic telecommunication provider of data, value added and hosting services within Latin America. Mr. Melamud received his master’s in business administration from the Olin Graduate School of Business at Babson College and is a certified public accountant in Argentina. | |
| | 38 | | | MercadoLibre 2022 Proxy Statement | | |
Executive Officers | | |
| | | Juan Martin de la Serna is an Executive Vice President in charge of Corporate Affairs and is Argentina’s President since 2020. Prior To this appointment, he served as Business Development Manager from 1999 until 2001, Head of Category Management from 2001 to 2004, Country Manager responsible for overseeing the Company's operations in Argentina, Uruguay, Ecuador, Perú, Costa Rica, Panamá and Dominican Republic from 2004 to 2012 and Senior Vice President of Mercado Envíos from 2012 to 2020. Before joining us, Mr. de la Serna worked in financial markets for more than 10 years. He was also President of the Argentina Chamber of Commerce (Cámara Argentina de Comercio Electrónico) (CACE) in 2009. Mr. de la Serna graduated from the University of Buenos Aires with a degree in economics. | |
| | | Ariel Szarfsztejn has served as an Executive Vice President of Commerce since January 2022. He joined Mercado Libre in 2017 as Vice President of Strategy and Corporate Development. Then, from 2018 to 2020 he was Vice President of Mercado Envios, and from 2020 to 2021 Senior Vice President and head of Mercado Envios. Before joining Mercado Libre, Mr. Szarfsztejn worked at Despegar (NYSE: DESP) where he was responsible for managing the hotels business unit. Prior to that, he spent several years leading strategy consulting projects for Boston Consulting Group in Latin America. Mr. Szarfsztejn holds a Cum-Laude Degree in Economics from University of Buenos Aires and has an MBA from the Stanford University Graduate School of Business. | |
| | MercadoLibre 2022 Proxy Statement | | | 39 | | |
20
Our executive officers serve at the discretion of our board, and serve until their successors are elected and qualified or until their earlier death, resignation or removal. The following table contains information regarding our executive officers as of March 1, 2019.
| | 40 | | | ||
MercadoLibre 2022 Proxy Statement | | | ||||
|
|
| ||||
|
|
| ||||
|
|
| ||||
|
|
| ||||
|
|
| ||||
|
|
| ||||
|
|
|
For biographical information on our chief executive officer, please see the biographical description provided above under the caption “Information on Our Board of Directors and Corporate Governance.”
Pedro Arnt has served as our chief financial officer since June 1, 2011. Prior to his appointment as chief financial officer, Mr. Arnt served in various capacities since joining MercadoLibre in December 1999. He initially led the business development and marketing teams as vice president, and later managed our customer service operations. He then held the position of vice president of strategic planning, treasury and investor relations, actively participating in our transition from a private to a public company, and playing an important role in capital markets, corporate finance, strategic planning and treasury initiatives. Prior to joining MercadoLibre, Mr. Arnt worked for The Boston Consulting Group. He is a Brazilian citizen and holds a bachelor’s degree, magna cum laude, from Haverford College and a master’s degree from the University of Oxford.
Stelleo Tolda has served as our chief operating officer since April 1, 2009. Prior to his appointment as chief operating officer, Mr. Tolda served as a senior vice president and as our country manager of Brazil since 1999. In that role he guided MercadoLibre to its current position as the leading e-commerce marketplace in Brazil. Before joining MercadoLibre, Mr. Tolda worked at Lehman Brothers Inc. in the United States in 1999, and at Banco Pactual and Banco Icatu in Brazil, from 1996 to 1997 and 1994 to 1996, respectively. He holds a master’s in business administration from Stanford University, and a master’s degree and bachelor’s degree in mechanical engineering, also from Stanford.
Osvaldo Giménez is an executive vice president and has been responsible for MercadoPago operations since February 2004. Mr. Giménez joined MercadoLibre in January 2000 as country manager of Argentina and Chile. Before joining us, Mr. Giménez was an associate in Booz Allen and Hamilton and worked for Santander Investments in New York. Mr. Giménez received a master’s in business administration from Stanford University and graduated from Buenos Aires Technological Institute with a bachelor’s degree in industrial engineering.
TABLE OF CONTENTSDaniel Rabinovich is an executive vice president and has served as our chief technology officer since January 2011. Prior to this appointment, Mr. Rabinovich served as our vice president of product development since January 2009, having joined MercadoLibre in March 2000 as an application architect. Before joining us, he worked in the application architecture team at PeopleSoft. Mr. Rabinovich holds a master’s degree in Technological Services Management from the Universidad de San Andres and graduated with honors from Buenos Aires University with a degree in information systems.
Marcelo Melamud is a senior vice president and has served as our chief accounting officer since August 15, 2008. Prior to this appointment, Mr. Melamud served as our vice president—administration and control since April 2008. From July 2004 through March 2008, he served as the director of finance of MDM Hotel Group, a developer, owner and operator of Marriott branded hotels in Miami, Florida. From July 1998 through July 2004, Mr. Melamud worked in various finance roles for Fidelity Investments, a provider of investment products and services. During his work at Fidelity Investments, Mr. Melamud served as the director of finance of the World Trade Center Boston/Seaport Hotel and he also served as the director of finance of MetroRed Telecom Group Ltd., a fiber-optic telecommunication provider of data, value added and hosting services within Latin America. Mr. Melamud received his master’s in business administration from the Olin Graduate School of Business at Babson College and is a certified public accountant in Argentina.
21
BENEFICIAL OWNERSHIP OF OUR COMMON STOCK
■ |
|
■ |
|
■ |
|
■ |
|
| | | Total Common Stock(1) | | ||||
| Name and Address of Beneficial Owner | | | Number | | | Percentage | |
| Five percent stockholders (1): | | | | | | ||
| Baillie Gifford & Co. (2) | | | 4,957,539 | | | 9.84% | |
| Galperin Trust (3) | | | 3,900,000 | | | 7.74% | |
| Capital Research Global Investors (4) | | | 4,641,606 | | | 9.21% | |
| Directors and executive officers: | | | | | | ||
| Marcos Galperin | | | — | | | — | |
| Pedro Arnt | | | 19,129 | | | * | |
| Osvaldo Giménez | | | 18,385 | | | * | |
| Daniel Rabinovich | | | — | | | — | |
| Stelleo Tolda (5) | | | 91,003 | | | * | |
| Marcelo Melamud | | | 55 | | | * | |
| Emiliano Calemzuk (6)(7) | | | 320 | | | * | |
| Nicolás Galperin | | | — | | | — | |
| Richard Sanders | | | — | | | — | |
| Susan Segal (7) | | | 403 | | | * | |
| Mario Vázquez (7) | | | 2,757 | | | * | |
| Roberto Balls Sallouti (7) | | | 403 | | | * | |
| Alejandro Nicolás Aguzin (7) | | | 4,403 | | | * | |
| Ariel Szarfsztejn (8) | | | 76 | | | * | |
| | MercadoLibre 2022 Proxy Statement | | | 41 | | |
|
|
|
|
|
|
|
| Total Common Stock (1) | |||
Name and Address of Beneficial Owner |
| Number |
| Percentage | |
Five percent stockholders (1): |
|
|
|
| |
Baillie Gifford & Co. (2) |
| 5,208,620 |
| 10.56 | % |
Galperin Trust (3) |
| 4,000,000 |
| 8.11 | % |
EuroPacific Growth Fund (4) |
| 3,424,500 |
| 6.94 | % |
Capital Research Global Investors (5) |
| 2,739,040 |
| 5.55 | % |
|
|
|
|
|
|
Directors and executive officers: |
|
|
|
|
|
Marcos Galperin |
| — |
| — |
|
Pedro Arnt |
| 19,129 |
| * |
|
Osvaldo Giménez |
| 18,385 |
| * |
|
Daniel Rabinovich |
| — |
| — |
|
Stelleo Tolda (6) |
| 91,003 |
| * |
|
Marcelo Melamud |
| — |
| — |
|
Emiliano Calemzuk |
| 2,669 |
| * |
|
Nicolás Galperin |
| — |
| — |
|
Javier Olivan |
| — |
| — |
|
Meyer Malka (7) |
| 51,686 |
| * |
|
Susan Segal |
| — |
| — |
|
Mario Vázquez |
| 2,354 |
| * |
|
Roberto Balls Sallouti |
| — |
| — |
|
Alejandro Nicolás Aguzin |
| 10,000 |
| * |
|
All directors and executive officers as a group (14 persons) |
| 195,226 |
| * |
|
Beneficial Ownership of Our Common Stock | | |
*Indicates less than 1% ownership
(1)Based on an aggregate amount of 49,318,513 shares of our common stock issued and outstanding as of April 15, 2019. Total Common Stock(1) Name and Address of Beneficial Owner Number Percentage Juan Martín de la Serna 500 * Henrique Dubugras (7)(9) 933 * Andrea Mayumi Petroni Merhy — — All directors, director nominee and executive officers as a group (17 persons) 138,367 * * Indicates less than 1% ownership 1. Based on an aggregate amount of 50,377,981- shares of our common stock issued and outstanding as of April 12, 2022. 2. According to a Schedule 13G/A filed on January 26, 2022 by Baillie Gifford & Co., Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN, Scotland, UK (“Baillie Gifford”), a non-U.S. institution, Baillie Gifford is the beneficial owner of 4,957,539 shares of our common stock. Baillie Gifford has sole voting power over 4,217,857 shares of our common stock and sole dispositive power over 4,957,539 shares of our common stock. Securities reported on the Schedule 13G/A as being beneficially owned by Baillie Gifford are held by Baillie Gifford and/or one or more of its investment adviser subsidiaries, which may include Baillie Gifford Overseas Limited, on behalf of investment advisory clients, which may include investment companies registered under the Investment Company Act, employee benefit plans, pension funds or other institutional clients. 3. According to a Schedule 13G/A filed on February 3, 2021 jointly by the Galperin Trust, Alpenstrasse 15, Zug, CH-6304,Switzerland (the “Trust”), Meliga No. 1 Limited Partnership (“Meliga LP”) and Volorama Stichting (each a “Reporting Person”), each Reporting Person is the beneficial owner of 3,900,000 shares of our common stock, resulting from gifts to the Trust of an aggregate of 4,253,225 shares of common stock by Marcos Galperin and his spouse (collectively, the “Settlors”) in connection with an estate planning transaction. Meliga LP sold 253,225 and 100,000 shares of Common Stock on August 5, 2016 and on December 9, 2020, respectively. The Trust is an irrevocable trust formed under New Zealand law by the Settlors that was established for the benefit of Mr. Galperin’s children and parents and certain charitable organizations. Intertrust Suisse Trustee GMBH (the “Trustee”) acts as the independent trustee of the Trust. As part of the estate planning transactions, the Trust concurrently transferred the Galperin Trust Shares to Meliga LP, a New Zealand limited partnership in which the Trust owns an approximately 99.999% limited partnership interest. Volorama Stichting, a Dutch foundation based in Amsterdam, The Netherlands, serves as the general partner (the “General Partner”) of Meliga LP. Pursuant to the limited partnership agreement of Meliga LP, the Galperin Trust Shares may not be voted or disposed of without the approval of the Trust (as limited partner) and the General Partner. In addition, pursuant to the settlement deed of the Trust, the Trustee is required to obtain the majority approval of a protective committee comprised of three individuals prior to taking any action with respect to voting or disposing of any of the Galperin Trust Shares. The Trust and Volorama Stichting each have shared voting power over 3,900,000 shares of our common stock and shared dispositive power over 3,900,000 shares of our common stock, and Meliga LP has shared voting power over 3,900,000 shares of our common stock and sole dispositive power over 3,900,000 shares of our common stock. 4. According to a Schedule 13G/A filed on February 11, 2022 by Capital Research Global Investors, 333 South Hope Street, 55th Fl, Los Angeles, California 90071 (“Capital Research”), an investment adviser registered under Section 240.13d-1(b)(1)(ii)(E)of the Investment Advisers Act of 1940, Capital Research is the beneficial owner of 4,641,606 shares of our common stock. Capital Research has sole voting power over 4,638,566 shares of our common stock and sole dispositive power over 4,641,606 shares of our common stock. Capital Research Global Investors is a division of Capital Research and Management Company (“CRMC”), as well as its investment management subsidiaries and affiliates Capital Bank and Trust Company, Capital International, Inc., Capital International Limited, Capital International Sarl, Capital International K.K. and Capital Group Private Client Services, Inc. (together with CRMC, the “investment management entities”). Capital Research divisions of each of the investment management entities collectively provide investment management services under the name “Capital Research Global Investors.” 5. Includes 91,003 shares held by Tool, Ltd., of which Stelleo Tolda owns all of the outstanding equity. 6. Includes 170 shares of common stock owned indirectly through a retirement account. 7. Includes 88 shares of common stock, subject to forfeiture and transfer restrictions until the 2022 Annual Meeting of the shareholders of MercadoLibre, Inc. 8. Includes one share of common stock in the form of 60 MercadoLibre, Inc. CEDEARs. 9. Includes 845 shares held indirectly through TDB Capital LLC. 42 MercadoLibre 2022 Proxy Statement
22
(2)According to a Schedule 13G/A filed on February 8, 2019 by Baillie Gifford & Co., Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN, Scotland, UK (“Baillie Gifford”), an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, Baillie Gifford is the beneficial owner of 5,208,620 shares of our common stock. Baillie Gifford has sole voting power over 2,171,645shares of our common stock and sole dispositive power over 5,208,620 shares of our common stock. Securities reported on the Schedule 13G/A as being beneficially owned by Baillie Gifford are held by Baillie Gifford and/or one or more of its investment adviser subsidiaries, which may include Baillie Gifford Overseas Limited, on behalf of investment advisory clients, which may include investment companies registered under the Investment Company Act, employee benefit plans, pension funds or other institutional clients.
(3)According to a Schedule 13G/A filed on February 14, 2017 jointly by the Galperin Trust,Alpenstrasse 15, Zug, CH-6304,Switzerland (the “Trust”), Meliga No. 1 Limited Partnership (“Meliga LP”) and Volorama Stichting (each a “Reporting Person”), each Reporting Person is the beneficial owner of 4,000,000 shares of our common stock, resulting from a gifts of an aggregate of 4,253,225 shares of common stock (the “Sch13 Shares”) by Marcos Galperin and his spouse (collectively, the “Settlors”) in connection with an estate planning transaction and according to Mr. Galperin’s Form 4 filed on February 24, 2015 relating to Mr. Galperin’s gift of 456,662 shares of common stock (together with the Sch13 Shares, the “Galperin Trust Shares”) to the Trust. Meliga LP sold 253,225 shares of Common Stock on August 5, 2016. The Trust is an irrevocable trust formed under New Zealand law by the Settlors that was established for the benefit of Mr. Galperin’s children and parents and certain charitable organizations. Intertrust Suisse Trustee GMBH (the “Trustee”) acts as the independent trustee of the Trust. As part of the estate planning transaction, the Trust concurrently transferred the Galperin Trust Shares to Meliga LP, a New Zealand limited partnership in which the Trust owns an approximately 99.999% limited partnership interest. Volorama Stichting, a Dutch foundation based in Amsterdam, The Netherlands, serves as the general partner (the “General Partner”) of Meliga LP. Pursuant to the limited partnership agreement of Meliga LP, the Galperin Trust Shares may not be voted or disposed of without the approval of the Trust (as limited partner) and the General Partner. In addition, pursuant to the settlement deed of the Trust, the Trustee is required to obtain the majority consent of a protective committee comprised of three individuals prior to taking any action with respect to voting or disposing of any of the Galperin Trust Shares. The Reporting Persons have shared voting power over 4,000,000 shares of our common stock and shared dispositive power over 4,000,000 shares of our common stock.
(4)According to a Schedule 13G filed on February 14, 2019 by EuroPacific Growth Fund, 333 South Hope Street, Los Angeles, California 90071 (“EuroPacific”), an investment company registered under Section 8 of the Investment Advisers Act of 1940, EuroPacific is the beneficial owner of 3,424,500 shares of our common stock. EuroPacific is advised by Capital Research and Management Company, which manages equity assets for various investment companies through three divisions: Capital Research Global Investors, Capital World Investors, and Capital International Investors. EuroPacific’s shares may also be reflected in a filing made by Capital Research Global Investors, Capital International Investors and/or Capital World Investors.
(5)According to a Schedule 13G filed on February 14, 2019 by Capital Research Global Investors, 333 South Hope Street, Los Angeles, California 90071 (“Capital Research”), an investment adviser registered under Section 240.13d-1(b)(1)(ii)(E)of the Investment Advisers Act of 1940, Capital Research is the beneficial owner of 2,739,040 shares of our common stock. Capital Research has sole voting power over 2,739,040 shares of our common stock and sole dispositive power over 2,739,040 shares of our common stock. Capital Research is a division of Capital Research and Management Company.
(6)Includes 91,003 shares held by Tool, Ltd., of which Stelleo Tolda owns all of the outstanding equity.
(7)Includes 49,978 shares of common stock owned of record by Ribbit Capital IV, L.P. (“Fund IV”) for itself and as nominee for Ribbit Founder Fund IV, L.P. (“FF IV”). Mr. Malka is the sole director of Ribbit Capital GP IV, Ltd., the general partner of each of Fund IV and FF IV, and as such, may be deemed to hold voting and investment power with respect to such shares. Mr. Malka disclaims beneficial ownership with regard to such shares, except to the extent of his proportionate pecuniary interest therein.
23
■ |
| Marcos Galperin, President and Chief Executive Officer |
■ |
| Pedro Arnt, Executive Vice President and Chief Financial Officer |
■ |
| Stelleo Tolda, Commerce President |
■ | Osvaldo Giménez, Fintech President |
■ | Daniel Rabinovich, Executive Vice President and Chief Operating Officer |
|
|
|
|
The Executive Summary below provides an overview of our performance during 20182021 and its correlation to our compensation decisions and practices.
Our Business
Founded in 1999, MercadoLibre is the leading e-commerce company in Latin America. Through its six integrated e-commerce platforms including MercadoLibre, MercadoPago and MercadoEnvíos, it offers technology solutions that enable companies and individuals to buy, sell, announce, send and pay for goods and services over the internet. MercadoLibre serves millions of users, providing compelling technology-based solutions that democratize commerce and money, thus contributing to the development of a large and growing digital economy.
■ |
| aligning our management team’s interests with stockholders’ expectations; |
■ |
| effectively compensating our management team for actual performance over the short and long term; |
■ |
| attracting and retaining an experienced and effective management team; |
■ |
| motivating and rewarding our management team to produce growth and performance for our stockholders that is sustainable and consistent with prudent risk-taking and based on sound corporate governance practices; and |
■ |
| providing market competitive levels of target (i.e., opportunity) compensation. |
| | MercadoLibre 2022 Proxy Statement | | | 43 | | |
Executive Compensation | | |
24
Structure of Our 20182021 Executive Compensation Program
| |||||
Element of Pay | | | Description of Element | | |
| Base Salary | | | Annual fixed cash compensation established based on the scope of the responsibilities and individual experience of our named executive officers, taking into account competitive market compensation. | |
| Annual Bonus | | | Annual cash bonuses to compensate named executive officers for achieving short-term financial and operational goals during the preceding fiscal year. | |
| Long-Term Retention Plan Bonus (“ | | | Long-term cash incentive paid over a six-year period through annual fixed payments as well as annual variable payments that depend on the value of our stock over the six-year period over which the bonus is paid. | |
2021
■ |
| Base salary represents a relatively small percentage of total direct compensation for our named executive officers, with a significant portion of our named executive officers’ compensation based on the |
■ |
| The bonuses granted to our named executive officers under our |
■ |
| We continue to provide no executive perquisites. |
| | 44 | | | MercadoLibre 2022 Proxy Statement | | |
Executive Compensation | | |
25
Role of Executive Officers and Consultants
To facilitate making external
|
|
|
|
|
|
|
|
|
|
|
We also participate and analyze different surveys of market compensation practices in our industry and broadly across all industries. To determining 2018determine 2021 executive officer compensation, our compensation committee takes ininto consideration information about compensation peers and market survey to craft competitive compensation packages appropriate for our particular executives.
| | MercadoLibre 2022 Proxy Statement | | | 45 | | |
Executive Compensation | | | ||||||||||||||||||||||||
26
Elements of Compensation Paid to Named Executive Officers in 2018, 2017 and 2016 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in U.S. |
| Year |
| Base |
| Annual |
| Long Term Retention Plans (Cash)(2) |
| Total | ||||||||||||||||
dollars) |
|
|
| Salary ($)(1) |
| Bonus ($)(1)(*) |
| 2009 ($) |
| 2010 ($) |
| 2011 ($) |
| 2012 ($) |
| 2013 ($) |
| 2014 ($) |
| 2015 ($) |
| 2016 ($) |
| 2017 ($) |
| ($)(**) |
Marcos Galperin |
| 2018 |
| 552,767 |
| - |
| - |
| - |
| 723,710 |
| 628,065 |
| 2,506,501 |
| 1,846,079 |
| 1,752,605 |
| 1,936,829 |
| 1,470,151 |
| 11,416,707 |
President and |
| 2017 |
| 732,889 |
| 1,014,770 |
| - |
| 843,577 |
| 626,667 |
| 546,445 |
| 2,182,227 |
| 1,628,300 |
| 1,549,899 |
| 1,704,417 |
| 1,312,991 |
| 12,142,185 |
CEO |
| 2016 |
| 602,195 |
| 833,684 |
| 327,565 |
| 559,323 |
| 427,844 |
| 379,231 |
| 1,517,874 |
| 1,182,162 |
| 1,134,639 |
| 1,228,313 |
| - |
| 8,192,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pedro Arnt |
| 2018 |
| 216,709 |
| - |
| - |
| - |
| 350,182 |
| 303,902 |
| 472,098 |
| 347,708 |
| 330,102 |
| 364,800 |
| 276,902 |
| 2,662,403 |
Executive VP |
| 2017 |
| 270,037 |
| 311,581 |
| - |
| 26,388 |
| 303,226 |
| 264,409 |
| 411,021 |
| 306,689 |
| 291,922 |
| 321,026 |
| 247,301 |
| 2,753,600 |
and CFO |
| 2016 |
| 228,077 |
| 253,606 |
| 49,135 |
| 17,496 |
| 207,021 |
| 183,499 |
| 285,890 |
| 222,659 |
| 213,708 |
| 231,352 |
| - |
| 1,892,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stelleo Tolda |
| 2018 |
| 243,915 |
| - |
| - |
| - |
| 350,182 |
| 303,902 |
| 472,098 |
| 347,708 |
| 330,102 |
| 364,800 |
| 309,042 |
| 2,721,749 |
Executive VP |
| 2017 |
| 264,788 |
| 366,630 |
| - |
| 408,183 |
| 303,226 |
| 264,409 |
| 411,021 |
| 306,689 |
| 291,922 |
| 321,026 |
| 276,006 |
| 3,213,899 |
and COO |
| 2016 |
| 220,298 |
| 325,025 |
| 163,783 |
| 270,640 |
| 207,021 |
| 183,499 |
| 285,890 |
| 222,659 |
| 213,708 |
| 231,352 |
| - |
| 2,323,876 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Osvaldo Giménez |
| 2018 |
| 227,165 |
| - |
| - |
| - |
| 175,091 |
| 303,902 |
| 472,098 |
| 347,708 |
| 330,102 |
| 364,800 |
| 309,042 |
| 2,529,908 |
Executive VP - Payments |
| 2017 |
| 283,068 |
| 326,617 |
| - |
| 204,091 |
| 151,613 |
| 264,409 |
| 411,021 |
| 306,689 |
| 291,922 |
| 321,026 |
| 276,006 |
| 2,836,462 |
|
| 2016 |
| 239,078 |
| 319,006 |
| 60,272 |
| 135,320 |
| 103,511 |
| 183,499 |
| 285,890 |
| 222,659 |
| 213,708 |
| 231,352 |
| - |
| 1,994,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel Rabinovich |
| 2018 |
| 216,709 |
| - |
| - |
| - |
| 55,657 |
| 120,753 |
| 472,098 |
| 347,708 |
| 442,101 |
| 488,572 |
| 370,851 |
| 2,514,449 |
Executive VP and |
| 2017 |
| 270,037 |
| 311,581 |
| - |
| 26,388 |
| 48,194 |
| 105,060 |
| 411,021 |
| 306,689 |
| 390,967 |
| 429,945 |
| 331,207 |
| 2,631,090 |
CTO |
| 2016 |
| 228,077 |
| 253,606 |
| 49,135 |
| 17,496 |
| 32,903 |
| 72,912 |
| 285,890 |
| 222,659 |
| 286,217 |
| 309,846 |
| - |
| 1,758,742 |
(*)Please note that the values above, have excluded any allowance.
(**)The table above may not total due to rounding.
(1)Base salaries in respect of fiscal year 2018 are paid in Argentine pesos except for Stelleo Tolda whose base salary is paid in Brazilian Realesbut disclosed above in U.S. dollars in each case, at the average exchange rate for the year ended December 31, 2018.
(2)For a description of our LTRPs, as defined below, see “—Elements of Compensation—Long-Term Retention Plans”Compensation Paid to Named Executive Officers in 2021, 2020 and “—Prior Long-Term Retention Plans” below.
2019
| in U.S. dollars | | | Year | | | Base Salary ($)(1) | | | Annual Bonus ($)(1)(2)(3) | | | Long Term Retention Plans (Cash)(4) | | | Total ($)(*) | | |||||||||||||||||||||
| 2012 ($) | | | 2014 ($) | | | 2015 ($) | | | 2016 ($) | | | 2017 ($) | | | 2019 ($) | | | 2020 ($)(2) | | | 2021 $ | | |||||||||||||||
| Marcos Galperin President and CEO | | | 2021 | | | 400,146 | | | 343,232 | | | — | | | — | | | — | | | 6,707,822 | | | 4,696,339 | | | 2,716,874 | | | 1,798,279 | | | 1,009,162 | | | 17,671,854 | |
| 2020 | | | 350,973 | | | 264,355 | | | — | | | — | | | 6,067,354 | | | 6,883,905 | | | 4,815,408 | | | 2,779,380 | | | 1,834,748 | | | — | | | 22,996,123 | | |||
| 2019 | | | 507,186 | | | 103,886 | | | 989,436 | | | 2,810,295 | | | 2,650,085 | | | 2,965,835 | | | 2,165,974 | | | 1,388,541 | | | — | | | — | | | 13,581,238 | | |||
| Pedro Arnt Executive VP and CFO | | | 2021 | | | 369,264 | | | 190,033 | | | — | | | — | | | — | | | 1,263,413 | | | 884,552 | | | 705,374 | | | — | | | 262,006 | | | 3,674,642 | |
| 2020 | | | 324,904 | | | 78,335 | | | — | | | — | | | 1,142,782 | | | 1,296,578 | | | 906,979 | | | 721,602 | | | — | | | — | | | 4,471,180 | | |||
| 2019 | | | 263,251 | | | 61,165 | | | 478,759 | | | 529,317 | | | 499,142 | | | 558,613 | | | 407,960 | | | 360,503 | | | — | | | — | | | 3,158,710 | | |||
| Stelleo Tolda Commerce President | | | 2021 | | | 248,213 | | | 180,397 | | | — | | | — | | | — | | | 1,263,413 | | | 987,223 | | | 720,790 | | | 477,086 | | | 394,487 | | | 4,271,609 | |
| 2020 | | | 249,835 | | | 183,757 | | | — | | | — | | | 1,142,782 | | | 1,296,578 | | | 1,012,253 | | | 737,373 | | | 486,761 | | | — | | | 5,109,339 | | |||
| 2019 | | | 302,831 | | | 50,365 | | | 478,759 | | | 529,317 | | | 499,142 | | | 558,613 | | | 455,312 | | | 368,382 | | | — | | | — | | | 3,242,721 | | |||
| Osvaldo Giménez Fintech President | | | 2021 | | | 378,123 | | | 253,682 | | | — | | | — | | | — | | | 1,263,413 | | | 987,223 | | | 707,381 | | | 468,210 | | | 394,487 | | | 4,452,519 | |
| 2020 | | | 337,485 | | | 82,115 | | | — | | | — | | | 1,142,782 | | | 1,296,578 | | | 1,012,253 | | | 723,655 | | | — | | | — | | | 4,594,868 | | |||
| 2019 | | | 275,953 | | | 64,116 | | | 478,759 | | | 529,317 | | | 499,142 | | | 558,613 | | | 455,312 | | | 361,528 | | | — | | | — | | | 3,222,740 | | |||
| Daniel Rabinovich Executive VP and COO | | | 2021 | | | 433,989 | | | 274,635 | | | — | | | — | | | — | | | 1,692,071 | | | 1,184,668 | | | 705,374 | | | 466,882 | | | 328,739 | | | 5,086,358 | |
| 2020 | | | 328,227 | | | 235,492 | | | — | | | — | | | 1,530,511 | | | 1,736,489 | | | 1,214,703 | | | 721,602 | | | 476,350 | | | — | | | 6,243,374 | | |||
| 2019 | | | 266,150 | | | 42,630 | | | 190,230 | | | 529,317 | | | 668,493 | | | 748,142 | | | 546,374 | | | 360,503 | | | — | | | — | | | 3,351,839 | |
* | The table above may not total due to rounding. |
1. | Base salaries in respect of fiscal year 2021 are paid in U.S dollar for Mr. Galperin, in Argentine pesos for Mr. Rabinovich, in Uruguayan pesos for Messrs. Giménez and Arnt and in Brazilian Reais for Mr. Tolda. Base salaries that are paid in Argentina pesos, Brazilian Reais or Uruguayan Pesos are disclosed above in U.S. dollars in each case, at the average exchange rate for each month of the year ended December 31, 2021. Mr. Galperin’s base salary is calculated considering a fixed amount in Uruguayan Pesos and then converted into U.S. dollars at the exchange rate of the monthly payroll calculation date. Annual Bonuses in respect of fiscal year 2021 are paid in U.S. dollar for Mr. Galperin, in Argentine pesos for Mr. Rabinovich, Brazilian Reais for Mr. Tolda and in Uruguayan Pesos for Mr. Arnt and Giménez. Except for Mr. Galperin whose annual bonus is calculated considering a fixed amount in Uruguayan Pesos and then converted into U.S. dollars at the exchange rate of the payroll calculation date and then paid in U.S. dollar, annual bonuses are disclosed above in U.S. dollars in each case, at the average exchange rate for the month of December, 2021. |
2. | 2020 Annual Bonus and portions of 2020 LTRP were cancelled for Mr. Arnt and Mr. Giménez due to the incident with an unaffiliated entity mentioned and described in our Annual Report on Form 10-K filed on March 1, 2021. A penalty was applied to Mr. Arnt canceling the 2020 Annual Bonus and the 1st and 2nd tranches of 2020 LTRP and to Mr. Giménez canceling the 2020 Annual Bonus and 1st tranche of 2020 LTRP. |
3. | Annual Bonus column includes the transition bonus approved by the Board on March 29, 2019, which was intended to fill a one-time gap in the total pay package that arose from the rebalancing that shifted a significant portion of the executive officers’ total pay package from the Company’s annual incentive plan to its long-term retention plans. |
4. | For a description of our LTRPs, as defined below, see “—Elements of Compensation—Long-Term Retention Plans” and “—Prior Long-Term Retention Plans” below. |
| | 46 | | | MercadoLibre 2022 Proxy Statement | | |
27
Executive Compensation | | |
A portion of each named executive officer’s annual bonus was based upon our company’s achievement of certain pre-determined goals for performance.
■ |
| Net revenues |
■ |
|
|
■ |
|
■ | Percentage of weighted Shipping lead time in less than 2 days: 50% of shipments delivered in less than two days (defined as the share of shipments delivered in less than two calendar days over total shipments of Mercado Libre); plus 50% of shipments delivered in less than one day (defined as the share of shipments delivered in the same and next calendar day); and |
■ | Competitive NPS, which stands for Net Promoter Score and is defined as a metric of our |
■ | Replace Total payment transactions and Percentage of shipments delivered in less than two days with Total payment volume and Percentage of weighted shipping lead time in less than 2 days, respectively, in order to align Performance Matrix with our main business goals for 2021. |
■ | Increase weight for Income from operations metric from 20% to 25%. |
■ | Reduce weight lead time in less than 2 days metric from 10% to 5%. |
| | MercadoLibre 2022 Proxy Statement | | | 47 | | |
Executive Compensation | | |
| Consolidated Performance— Constant Dollars(1) | | | Marcos Galperin | | | Pedro Arnt | | | Stelleo Tolda | | | Osvaldo Giménez | | | Daniel Rabinovich | |
| Net Revenues | | | 50.0 | | | 50.0 | | | 50.0 | | | 50.0 | | | 50.0% | |
| Income from operations | | | 25.0 | | | 25.0 | | | 25.0 | | | 25.0 | | | 25.0 | |
| Total Payment Volume | | | 10.0 | | | 10.0 | | | 10.0 | | | 10.0 | | | 10.0 | |
| Weighted Shipping Lead time in less than 2 days | | | 5.0 | | | 5.0 | | | 5.0 | | | 5.0 | | | 5.0 | |
| Competitive NPS | | | 10.0 | | | 10.0 | | | 10.0 | | | 10.0 | | | 10.0 | |
| Overall Performance(2) | | | 100.0 | | | 100.0 | | | 100.0 | | | 100.0 | | | 100.0% | |
| Individual Performance Multiplier(3) | | | | | | | | | | | | |||||
| Above Expectations | | | 1.5 | | | 1.5 | | | 1.5 | | | 1.5 | | | 1.5 | |
| Meet Expectations | | | 1.0 | | | 1.0 | | | 1.0 | | | 1.0 | | | 1.0 | |
| Below Expectations | | | 0.5 | | | 0.5 | | | 0.5 | | | 0.5 | | | 0.5 | |
1. | Constant Dollars: financial metrics translated to U.S. dollars at the previous year’s applicable exchange rate, which is intended to isolate the operational performance from fluctuations in local currencies. |
2. | Overall Performance for our named executive officers is equal to the Weighted Average for the Consolidated Performance—Constant Dollars. |
3. | Individual Performance Multiplier is set as a multiplier for the annual bonus for each executive officer based on the qualitative assessment of individual performance for the 2021 fiscal year. |
| Metrics | | | 2021 ACTUAL (in MM) | | | 2021 Target (in MM) | | | Minimum Achievement as percentage of Target(1) | | | % of Objective(2) | |
| Consolidated Performance—Constant Dollars | | | | | | | | | | ||||
| Net Revenues - adjusted | | | 7,507.9 | | | 7,561.4 | | | 75.5% | | | 99.3% | |
| Income from operations | | | 528.7 | | | 418.2 | | | 75.0% | | | 120.0% | |
| Total Payment Volume - adjusted | | | 85,634.7 | | | 82,848.8 | | | 79.7% | | | 103.4% | |
| Percentage of Weighted Shipping Lead time in less than 2 days | | | 45.4% | | | 52.8% | | | 90.0% | | | 86.1% | |
| Competitive NPS | | | 61.2% | | | 65.2% | | | 95.0% | | | 93.8% | |
| Weighted Average - Overall Performance | | | | | | | 78.5% | | | 103.7% | | ||
| Individual Performance Multiplier | | | | | | | | | | ||||
| Messrs. Arnt and Tolda | | | | | | | | | 1.0 | | |||
| Messrs. Galperin, Giménez and Rabinovich | | | | | | | | | 1.5 | |
| | 48 | | | MercadoLibre 2022 Proxy Statement | | |
28
Executive Compensation | | |
1. | The minimum weighted average as percentage of target to meet the Minimum Eligibility Conditions was established at 78.5%. The minimum achievement for Net Revenues – adjusted and Total Payment Volumes - adjusted is set as the midpoint between 2020 achievements and 2021 targets, for Income from operations is set considering a maximum deviation of 1.5% of Net Revenues - adjusted that equals 75% accomplishment, for Weighted shipping lead time delivered in less than two days and NPS it is set at 90% and 95%, respectively. |
2. | Percentage of target cannot be higher than 120% to limit the subsidy of over-performing to underperforming metrics. Weighted Average - Overall Performance cannot be higher than 110% and for payment purposes is capped at 100%. |
2018
■ |
| a cash payment equal to 16.66% of half of his or her |
■ |
| on each date our |
2018
| | | Nominal Target Value of 2021 LTRP Bonus(1) | | | Portion of 2021 LTRP Bonus Paid Out in respect of 2021 | | |
| Marcos Galperin | | | $6,139,585 | | | $1,009,162 | |
| Pedro Arnt | | | $1,594,002 | | | $262,006 | |
| Stelleo Tolda | | | $2,400,000 | | | $394,487 | |
| Osvaldo Giménez | | | $2,400,000 | | | $394,487 | |
| Daniel Rabinovich | | | $2,000,000 | | | $328,739 | |
(1) | ||||||
|
| |||||
|
|
|
| |||
|
|
|
| |||
|
|
|
| |||
|
|
|
| |||
|
|
|
|
The following table describes the components of each named executive officer’s 2018 annual bonus and 2018 LTRP bonus and the percentage weight of each element:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Marcos |
|
| Pedro |
|
| Stelleo |
|
| Osvaldo |
|
| Daniel |
|
|
| Galperin |
|
| Arnt |
|
| Tolda |
|
| Giménez |
|
| Rabinovich |
|
Consolidated Performance—Constant Dollars (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues Minus Bad Debt (excluding Venezuela) (2) |
| 60.0 | % |
| 60.0 | % |
| 60.0 | % |
| 60.0 | % |
| 60.0 | % |
Net Income (excluding Venezuela) (3) |
| 30.0 |
|
| 30.0 |
|
| 30.0 |
|
| 30.0 |
|
| 30.0 |
|
Competitive NPS (4) |
| 10.0 |
|
| 10.0 |
|
| 10.0 |
|
| 10.0 |
|
| 10.0 |
|
Overall Performance (5) |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % |
Individual Performance Multiplier (6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Above Expectations |
| 1.2 |
|
| 1.2 |
|
| 1.2 |
|
| 1.2 |
|
| 1.2 |
|
Meet Expectations |
| 1 |
|
| 1 |
|
| 1 |
|
| 1 |
|
| 1 |
|
Below Expectations |
| 0.5 |
|
| 0.5 |
|
| 0.5 |
|
| 0.5 |
|
| 0.5 |
|
(1)Constant Dollars: financial metrics translated to U.S. dollars at the previous year’s applicable exchange rate, which is intended to isolate the operational performance from fluctuations in local currencies.
29
(2)Net Revenues Minus Bad Debt is defined as our net revenues, less bad debt charges and after adjustments for unusual items, if any, as determined by the compensation committee.
(3)Net Income is defined as our net income after adjustments for unusual items, if any, as determined by the compensation committee.
(4)CompetitiveNPS stands for Net Promoter Score and is a standard customer satisfaction metric, calculated as the percentage of promoters (customers likely to recommend MercadoLibre ) minus the percentage of detractors (customers not likely to recommend MercadoLibre). This metric is measured by Ipsos, a global market research consultant, through anonymous surveys that compare MercadoLibre with its main e-commerce competitors in each country.
(5)Overall Performance for our named executive officers is equal to the Weighted Average for the Consolidated Performance—Constant Dollars.
(6)Individual Performance Multiplier is set as a multiplier for the annual bonus for each executive officer based on the qualitative assessment of individual performance for the 2018 fiscal year.
2018 Annual Bonus and 2018 LTRP Bonus Performance Elements
The following table sets forth the target award levels for the various performance metrics (the “Minimum Eligibility Conditions”) included in the company performance goals for 2018 and actual performance realized against those objectives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metrics |
| 2018 Actual |
|
| 2018 |
|
| Minimum as |
|
| % of Objective |
|
|
| (in MM) |
|
| Objective (in MM) |
|
| percentage of Plan (1) |
|
| (2) |
|
Consolidated Performance—Constant Dollars |
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues Minus Bad Debt (excluding Venezuela) |
| 1,772.7 |
|
| 1,929.3 |
|
| 79.8 | % |
| 91.9 | % |
Net Income (excluding Venezuela) |
| 23.5 |
|
| 115.2 |
|
| 90.0 | % |
| 20.4 | % |
Competitive NPS |
| 58.4 | % |
| 59.9 | % |
| 95.0 | % |
| 97.5 | % |
Weighted average - Overall Performance |
|
|
|
|
|
|
| 84.4 | % |
| 71.0 | % |
Individual Performance Multiplier |
|
|
|
|
|
|
|
|
|
|
|
|
Messrs. Galperin, Arnt, Tolda, Gimenez and Rabinovich |
|
|
|
|
|
|
|
|
|
| 1.0 |
|
|
|
|
|
| | MercadoLibre 2022 Proxy Statement | | | 49 | | |
Employment agreements.We have entered into employment agreements with each named executive officer as described below under “Employment Agreements.” Certain named executive officers may also receive benefits in the event of a change in control of our (Chairman)Executive Compensation Other compensation and benefitsbenefits. . We maintain broad-based benefits that are provided to certain full-time employees, including our named executive officers, including health insurance, extra vacation days, mobile telephones, executive education sponsorship programs, parking spaces and subsidized English, Spanish and/or Portuguese lessons. We also provide life insurance policies for some of our employees, in Brazil and Argentina, including our named executive officers. We do not sponsor or maintain any pension plansofficers, and lend cars through our Eco Friendly Company car policy (MercadoLibre leases vehicles under this program for any of our employees.certain employees).30companyCompany as described under “Potential Payments Upon Termination or Change in Control.”Life insurance and retirement benefitsbenefits. . We provide executive life insurance policies for each named executive officer, except for Mr. Galperin, Messrs. Arnt, Giménez and Rabinovich, providing for coverage of up to $755,000, with twice the level of coverage in the event of the named executive officer’s accidental death or disability. For Mr. Tolda provides for coverage of up to R$9,855,600. We also provide a retirement benefit for our named executive officers, except for Mr. Galperin,Rabinovich, which consistsconsisted of monthly companyCompany contributions equal to 5%11.5% of the named executive officer’s base salary plus annual bonus and are credited with interest at aan average annual rate equal to 2-2.5%.1.67%, and for Mr. Tolda, which consisted of monthly Company contributions equal to 4% of the named executive officer’s base salary and were credited with interest at an average annual rate of 3.02% during 2021.Compensation Committee ReportThe compensation committee of the board as of the filing date of this Proxy Statement has reviewed and discussed the Compensation Discussion and Analysis section of this proxy statement with management and, based on such review and discussions, the compensation committee recommended to the board of directors that it be included in the company’sCompany’s Annual Report on Form 10-K for the year ended December 31, 2018,2021, as incorporated by reference from this proxy statement. COMPENSATION COMMITTEE April 22, 2019COMPENSATION COMMITTEEMeyer Malka (Chairman)Emiliano CalemzukMario VazquezSusan Segal Relationship of CompensationPractices to Risk ManagementWhen structuring our overall compensation practices for our employees generally, consideration is given as to whether the structure creates incentives for risk-taking behavior and therefore impacts our risk management practices. Attention is given to the elements and the mix of pay as well as ensuring that employees’ awards align with stockholders’ value.The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements, as discussed on page 15.arrangements. The compensation committee has assessed our compensation policies and practices for our employees in 20182021 and has concluded that these policies and practices ensure appropriate levels of risk-taking, while avoiding unnecessary risks that could have a material adverse effect on our company.Company.
| | 50 | | | MercadoLibre 2022 Proxy Statement | | |
31
Executive Compensation | | |
| Name and Principal Position | | | Year | | | Salary ($)(1) | | | Bonus ($)(2)(3) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | All Other Compensation ($) | | | Total ($) | |
| Marcos Galperin President and Chief Executive Officer | | | 2021 | | | 400,146 | | | 1,695,883 | | | 14,584,758(4) | | | — | | | 16,680,787 | |
| 2020 | | | 350,973 | | | 1,184,251 | | | 19,974,299 | | | — | | | 21,509,523 | | |||
| 2019 | | | 507,186 | | | — | | | 10,970,014 | | | — | | | 11,477,200 | | |||
| Pedro Arnt Executive Vice President and Chief Financial Officer | | | 2021 | | | 369,264 | | | 344,002 | | | 2,774,709(4) | | | 10,212(5) | | | 3,498,187 | |
| 2020 | | | 324,904 | | | 211,169 | | | 3,655,108 | | | 47,925 | | | 4,239,106 | | |||
| 2019 | | | 263,251 | | | — | | | 2,463,140 | | | 39,431 | | | 2,765,822 | | |||
| Stelleo Tolda Commerce President | | | 2021 | | | 248,213 | | | 578,840 | | | 3,247,056(4) | | | 9,071(6) | | | 4,083,180 | |
| 2020 | | | 249,835 | | | 378,840 | | | 4,189,830 | | | 9,149 | | | 4,827,654 | | |||
| 2019 | | | 302,831 | | | — | | | 2,496,738 | | | 59,698 | | | 2,859,267 | | |||
| Osvaldo Giménez Fintech President | | | 2021 | | | 378,123 | | | 548,538 | | | 3,328,358(4) | | | 11,436(7) | | | 4,266,455 | |
| 2020 | | | 337,485 | | | 215,326 | | | 3,751,223 | | | 52,013 | | | 4,356,047 | | |||
| 2019 | | | 275,953 | | | — | | | 2,503,635 | | | 41,201 | | | 2,820,788 | | |||
| Daniel Rabinovich Executive Vice President and Chief Operating Officer | | | 2021 | | | 433,989 | | | 510,669 | | | 3,891,700(4) | | | 84,435(8) | | | 4,920,793 | |
| 2020 | | | 328,227 | | | 344,002 | | | 5,196,145 | | | 59,375 | | | 5,927,749 | | |||
| 2019 | | | 266,150 | | | — | | | 2,593,918 | | | 38,574 | | | 2,898,642 | |
1. | Base salaries in respect of fiscal year 2021 are paid in U.S dollar for Mr. Galperin, in Argentine pesos for Mr. Rabinovich, in Uruguayan pesos for Messrs. Giménez and Arnt and in Brazilian Reais for Mr. Tolda. Base salaries that are paid in Argentina pesos, Brazilian Reais or Uruguayan Pesos are disclosed above in U.S. dollars in each case, at the average exchange rate for each month of the year ended December 31, 2021. Mr. Galperin’s base salary is calculated considering a fixed amount in Uruguayan Pesos and then converted into U.S. dollars at the exchange rate of the monthly payroll calculation date. |
2. | Includes the fixed portion of 2021, 2020 and 2019 LTRP bonus paid out in respect of 2021. We have historically included the fixed portion of prior LTRPs in the “Non-Equity Incentive Plan Compensation” column and are shifting our reporting posture to reflect more clearly the design of our LTRP as revised in 2019. Also includes the transition bonus approved by the Board on March 29, 2019 and paid out in 2021. See “—Elements of Compensation Paid to Named Executive Officers in 2021, 2020 and 2019” for more information. |
3. | Annual bonuses in respect of fiscal year 2021 are paid in U.S. dollar for Mr. Galperin, in Argentine pesos for Mr. Rabinovich, Brazilian Reais for Mr. Tolda and in Uruguayan Pesos for Mr. Arnt and Giménez. Except for Mr. Galperin whose annual bonus is paid in U.S. dollars, annual bonuses are disclosed above in U.S. dollars in each case, at the average exchange rate for the month of December, 2021. Transition bonus and LTRP awards are paid in U.S. dollars. |
4. | Includes the variable portion of prior LTRPs paid in January 2022 and the variable portion of the 2021 LTRP earned by each executive officer in respect of 2021, as well as annual bonus amounts earned in respect of 2021 and paid in 2022 of $182,245, $111,698, $73,030, $171,567 and $196,300, for each of Mr. Galperin, Mr. Arnt, Mr. Tolda, Mr. Giménez and Mr. Rabinovich, respectively. |
5. | Amount consists of our payment on behalf of Mr. Arnt of $10,212 in life insurance premiums. |
6. | Amount consists of our contributions of $9,071 under the retirement benefit provided to Mr. Tolda. |
7. | Amount consists of our payment on behalf of Mr. Giménez of $11,436 in life insurance premiums. |
8. | Amount consists of (i) our payment on behalf of Mr. Rabinovich of $8,376 in life insurance premiums and (ii) our contributions of $76,059 under the retirement benefit provided to Mr. Rabinovich. |
| | MercadoLibre 2022 Proxy Statement | | | 51 | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-Equity |
|
|
|
|
|
|
|
|
|
|
|
| Incentive Plan |
|
|
|
|
|
|
|
|
|
|
|
| Compensation |
|
|
|
|
|
|
Name and Principal Position |
| Year |
| Salary ($) (1) |
| ($) (2) |
|
| All Other Compensation ($) |
|
| Total ($) |
Marcos Galperin |
| 2018 |
| 552,767 |
| 8,142,465 | (3) |
| - |
|
| 8,695,232 |
President and Chief |
| 2017 |
| 732,889 |
| 11,539,116 |
|
| - |
|
| 12,272,005 |
Executive Officer |
| 2016 |
| 602,195 |
| 8,190,567 |
|
| - |
|
| 8,792,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pedro Arnt |
| 2018 |
| 216,709 |
| 1,861,055 | (3) |
| 26,170 | (4) |
| 2,103,934 |
Executive Vice |
| 2017 |
| 270,037 |
| 2,455,112 |
|
| 11,839 |
|
| 2,736,988 |
President and Chief Financial Officer |
| 2016 |
| 228,077 |
| 1,725,434 |
|
| - |
|
| 1,953,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stelleo Tolda |
| 2018 |
| 243,915 |
| 1,882,362 | (3) |
| 109,122 | (5) |
| 2,235,399 |
Executive Vice |
| 2017 |
| 264,788 |
| 2,919,653 |
|
| - |
|
| 3,184,441 |
President and Chief Operating Officer |
| 2016 |
| 220,298 |
| 2,100,575 |
|
| - |
|
| 2,320,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Osvaldo Giménez |
| 2018 |
| 227,165 |
| 1,736,764 | (3) |
| 27,347 | (6) |
| 1,991,276 |
Executive Vice |
| 2017 |
| 283,068 |
| 2,582,922 |
|
| 22,976 |
|
| 2,888,966 |
President—Payments |
| 2016 |
| 239,078 |
| 1,819,234 |
|
| - |
|
| 2,058,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel Rabinovich |
| 2018 |
| 216,709 |
| 1,703,261 | (3) |
| 23,732 | (7) |
| 1,943,702 |
Executive Vice |
| 2017 |
| 270,037 |
| 2,512,760 |
|
| 19,389 |
|
| 2,802,186 |
President and Chief Technology Officer |
| 2016 |
| 228,077 |
| 1,803,559 |
|
| - |
|
| 2,031,636 |
Executive Compensation | | |
(1)Base salaries are paid in Argentine pesos except for Stelleo Tolda whose base salary is paid in Brazilian Reales, but disclosed above in U.S. dollars, at the average exchange rate for the year in which the base salary was paid.
(2)Bonuses are paid in Argentine pesos except for Stelleo Tolda whose annual bonus is paid in Brazilian Reales, but disclosed above in U.S. dollars at the spot exchange rate as of the payment date.
(3)Includes the variable portion of prior LTRPs paid in April 2019.
(4)Amount consists of (i) our payment on behalf of Mr. Arnt of $9,498 in life insurance premiums and (ii) our contributions of $16,672 under the retirement benefit provided to Mr. Arnt.
(5)Amount consists of (i) our payment on behalf of Mr. Tolda of $575 in life insurance premiums and (ii) our contributions of $108,547 under the retirement benefit provided to Mr. Tolda.
(6)Amount consists of (i) our payment on behalf of Mr. Gimenez of $10,636 in life insurance premiums and (ii) our contributions of $16,711 under the retirement benefit provided to Mr. Gimenez.
(7)Amount consists of (i) our payment on behalf of Mr. Rabinovich of $7,790 in life insurance premiums and (ii) our contributions of $15,942 under the retirement benefit provided to Mr. Rabinovich.
32
2021 Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) Name Grant Date Threshold ($) Target ($) Maximum ($) Marcos Galperin 268,515 (2) 358,021 (2) (2) June 28, 2018 5,946,400 (3)(4) Pedro Arnt 113,615 (2) 151,486 (2) (2) June 28, 2018 1,120,000 (3)(4) Stelleo Tolda 160,090 (2) 213,453 (2) (2) June 28, 2018 1,250,000 (3)(4) Osvaldo Giménez 119,097 (2) 158,795 (2) (2) June 28, 2018 1,250,000 (3)(4) Daniel Rabinovich 113,615 (2) 151,486 (2) (2) June 28, 2018 1,500,000 (3)(4) Grants of Plan-Based Awards for 2018The table below summarizes plan-based awards granted to our named executive officers in 2018.2021.447,526 189,358 266,816 198,494 189,358 (1)Represents estimated future payouts upon satisfaction of the Minimum Eligibility Conditions under our 2018 LTRP and 2018 annual bonus.(2)The amount set forth reflects the annual discretionary cash bonus amounts that potentially could have been earned during 2018 based upon the executive’s performance goals.(3)See “—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Retention Plans – 2018 Long-Term Retention Plan” for information regarding the terms of the 2018 LTRP bonus.(4)The maximum amount of each named executive officer’s 2018 LTRP bonus will depend on our stock price for the last 60-trading days of the applicable fiscal year. Estimated Possible Payouts UnderNon-Equity Incentive Plan Awards Name Grant Date Threshold ($) Target ($) Maximum ($) Marcos Galperin 30,374(1) 121,497 (1) 182,245(1) May 5, 2021 3,069,793 (2) Pedro Arnt 27,925(1) 111,698 (1) 167,548(1) May 5, 2021 797,001 (2) Stelleo Tolda(3) 18,258(1) 73,030 (1) 109,546(1) May 5, 2021 1,200,000(2) Osvaldo Giménez 28,595(1) 114,378 (1) 171,567(1) May 5, 2021 1,200,000(2) Daniel Rabinovich 32,717(1) 130,867 (1) 196,300(1) May 5, 2021 1,000,000(2) 1. Represents estimated future payouts for the 2021 annual bonus assuming threshold performance against corporate goals and a below expectations individual performance multiplier, target performance against corporate goals and a meets expectations individual performance multiplier and maximum performance against corporate goals and an above expectations individual performance multiplier, respectively. The actual cash bonuses earned in 2021 by our named executive officers have been determined and were paid in or about the first quarter of 2022. The amounts paid are included in the Summary Compensation Table under “Non-Equity Incentive Plan Compensation”. 2. Represents the variable portion of each named executive officer’s 2021 LTRP bonus. The maximum amount of the variable portion of each named executive officer’s 2021 LTRP bonus will depend on our stock price for the last 60 trading days of the applicable fiscal year. The fixed portions of the named executive officers’ 2021 LTRP bonus are included in the Summary Compensation Table under “Bonus”. See “—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Retention Plans – 2021 Long-Term Retention Plan” for information regarding the terms of the 2021 LTRP bonus. 3. Effective upon his termination of employment, Mr. Tolda forfeited any right to compensation set forth on the “Grants of Plan-Based Awards for 2021” table. We have entered into employment agreements and indemnification agreements with each of our named executive officers. For a detailed description, see “Employment Agreements” below.
| | 52 | | | MercadoLibre 2022 Proxy Statement | | |
Executive Compensation | | |
33
The agreements also provide that, during a named executive officer’s employment, and for a period of one year after the end of the named executive officer’s employment in the event of termination without “just cause,” and two years in the event of resignation or termination for “just cause” (the “non-competition period”), the named executive officer will not (1) compete directly or indirectly with us, (2) induce our or our subsidiaries’ employees to terminate their employment with us or to engage in any competitive business or (3) solicit or do business with any of our present, past or prospective customers or the customers of our subsidiaries.
.
| | MercadoLibre 2022 Proxy Statement | | | 53 | | |
Executive Compensation | | |
|
|
|
|
|
|
|
|
|
|
Name |
| Salary ($) |
| Total ($) |
Marcos Galperin |
| 626,536 |
| 626,536 |
Pedro Arnt |
| 265,101 |
| 265,101 |
Stelleo Tolda |
| 337,967 |
| 337,967 |
Osvaldo Giménez |
| 277,892 |
| 277,892 |
Daniel Rabinovich |
| 265,101 |
| 265,101 |
(1)Represents severance payable to the named executive officer as required under local law.
34
| Name | | | Salary ($) | | | Local law severance ($) | |
| Marcos Galperin | | | 366,304 | | | 301,719 | |
| Pedro Arnt | | | 363,020 | | | 254,062 | |
| Stelleo Tolda | | | 237,349 | | | 163,394 | |
| Osvaldo Giménez | | | 371,729 | | | 263,029 | |
| Daniel Rabinovich | | | 425,318 | | | 795,562 | |
Represents severance payable to the named executive officer as required under local law or pursuant to such officer’s employment agreement. As discussed above, upon a |
| Name | ||||
| | ||||
Non-Equity Incentive | |||||
| Plan Compensation ($)(2) | | |||
| Marcos Galperin | | 12,542,944 | | |
| Pedro Arnt | | 3,089,116 | | |
| Stelleo Tolda | | 3,515,186 | | |
| Osvaldo Giménez | | 3,477,321 | | |
| Daniel Rabinovich | | 3,406,007 | |
1. | Excludes any sale or stay bonuses payable under the Incentive Plan upon a sale of our Company, which bonus amounts are based on the purchased price in the event of a sale. See “—Potential Payments Upon Termination or Change in Control” for more information. |
2. | Represents 50% of the outstanding awards held by the named executive officers under the LTRPs. All outstanding awards payable in this case are based on the average closing price of our common stock during the final 60 trading days of 2021. |
(1)Excludes any sale or stay bonuses payable under the Incentive Plan upon a sale of our company, which bonus amounts are based on the purchased price in the event of a sale. See “—Potential Payments Upon Termination or Change in Control” for more information.
(2)Represents 50% of the outstanding awards held by the named executive officers under the LTRPs. All outstanding awards payable in this case are based on the average closing price of our common stock during the final 60 trading days of 2018.
| | 54 | | | MercadoLibre 2022 Proxy Statement | | |
Executive Compensation | | |
| Name | | | Salary ($)(2) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | Total ($) | |
| Marcos Galperin | | | 301,719 | | | 25,085,887 | | | 25,387,606 | |
| Pedro Arnt | | | 254,062 | | | 6,178,231 | | | 6,432,293 | |
| Stelleo Tolda | | | 163,394 | | | 7,030,372 | | | 7,193,766 | |
| Osvaldo Giménez | | | 263,029 | | | 6,954,641 | | | 7,217,670 | |
| Daniel Rabinovich | | | 795,562 | | | 6,812,013 | | | 7,607,575 | |
1. | Excludes any sale or stay bonuses payable under the Incentive Plan upon a sale of our Company, which bonus amounts are based on the purchased price in the event of a sale. See “—Potential Payments Upon Termination or Change in Control” for more information. |
2. | Represents severance payable to the named executive officer as required by local law solely in the event of a termination without Cause. |
3. | Represents 100% of all outstanding awards held by the named executive officers under the LTRPs. All outstanding awards payable in this case are based on the average closing price of our common stock during the final 60 trading days of 2021 and are payable in accordance with the ordinary payroll schedule or within 4 business days post termination. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-Equity Incentive |
|
|
Name |
| Salary ($) (2) |
| Plan Compensation ($) (3) |
| Total ($) |
Marcos Galperin |
| 626,536 |
| 17,670,445 |
| 18,296,981 |
Pedro Arnt |
| 265,101 |
| 3,513,822 |
| 3,778,923 |
Stelleo Tolda |
| 337,967 |
| 3,642,382 |
| 3,980,349 |
Osvaldo Giménez |
| 277,892 |
| 3,642,382 |
| 3,920,274 |
Daniel Rabinovich |
| 265,101 |
| 4,301,783 |
| 4,566,884 |
(1)Excludes any sale or stay bonuses payable under the Incentive Plan upon a sale of our company, which bonus amounts are based on the purchased price in the event of a sale. See “—Potential Payments Upon Termination or Change in Control” for more information.
(2)Represents severance payable to the named executive officer as required by local law solely in the event of a termination without Cause.
(3)Represents 100% of all outstanding awards held by the named executive officers under the LTRPs. All outstanding awards payable in this case are based on the average closing price of our common stock during the final 60 trading days of 2018 and are payable in accordance with the ordinary payroll schedule or within 4 business days post termination.
Potential Payments Upon Death, Disability or Retirement
35
Pay Ratio Disclosure
For 2018,
|
|
|
| The annual total compensation of our chief executive officer for | |
| | MercadoLibre 2022 Proxy Statement | | | 55 | | |
Executive Compensation | | |
| |||||
MercadoLibre main locations | | | Monthly minimum wage in USD | | |
| Brazil | | | 219 | |
| Argentina | | | 303 | |
| Mexico | | | 255 | |
| Colombia | | | 286 | |
| Chile | | | 410 | |
| Uruguay | | | 405 | |
| Peru | | | 237 | |
| |||||
U.S. (California state) | | 2,520 | |
| | 56 | | | MercadoLibre 2022 Proxy Statement | | |
36
PROPOSAL TWO:ADVISORY VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION
Section 14A of the Exchange Act added by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Financial Financial Reform Act”) provides our stockholders with an advisory (non-binding) vote to approve the compensation of our named executive officers as disclosed in this proxy statement.
■ |
|
■ |
|
■ |
|
| THE BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS FOR FISCAL YEAR 2021, AS DISCLOSED IN THIS PROXY STATEMENT. | |
| | MercadoLibre 2022 Proxy Statement | | | 57 | | |
CONTENTS
37
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 2018, Messrs. Malka (Chairman), Calemzuk, and Vazquez served as members of our compensation committee. None of the current members of our compensation committee has ever been an officer or employee of our company or our subsidiaries or had any relationship with us requiring disclosure as a related party transaction under applicable rules of the SEC. During fiscal year 2018, none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served on our compensation committee; none of our executive officers served as a director of another entity, one of whose executive officers served on our compensation committee; and none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served as a member of our board. All members of our compensation committee are independent in accordance with the applicable rules of NASDAQ and our corporate governance guidelines.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have entered into indemnification agreements with each of our directors and executive officers that obligate us to indemnify them to the fullest extent permitted by Delaware law.
Review, Approval or Ratification of Transactions with Related Parties
The board has delegated to the audit committee the responsibility to review and approve all transactions or series of transactions in which we or a subsidiary is a participant, the amount involved exceeds $120,000 and a “related person” (as defined in Item 404 of Regulation S-K) has a direct or indirect material interest. Transactions that fall within this definition will be referred to the audit committee for approval, ratification or other action. Based on its consideration of all of the relevant facts and circumstances, the audit committee will decide whether or not to approve the transaction and will approve only those transactions that are in the best interests of our company.
Audit Committee Report |
38
2021.
| | | AUDIT COMMITTEE | | |
| | | |||
| |||||
| Mario Vázquez, Chairman
Nicolás Aguzin Susan Segal | |
39
| | 58 | | | MercadoLibre 2022 Proxy Statement | | |
PROPOSAL THREE:
ADOPTIONTABLE OF THE AMENDED CONTENTSAND RESTATED 2009 EQUITY COMPENSATION PLAN
At the 2019 Annual Meeting, the stockholders will be asked to approve the adoption of the Amended and Restated 2009 Plan. In April 2019, the compensation committee recommended, and the full board adopted the Amended and Restated 2009 Plan. However, no award of an option will be exercisable by any award recipient and no grant of restricted stock shall be made unless and until the Amended and Restated 2009 Plan has been approved by the stockholders. We have not made any awards to date under the Amended and Restated 2009 Plan. We are asking our stockholders to adopt the Amended and Restated 2009 Plan solely due to the expiration of the 2009 Equity Compensation Plan (the “2009 Plan”). Adoption of the Amended and Restated 2009 Plan will give authority to MercadoLibre to issue 1,000,000 shares of its common stock. The Amended and Restated 2009 Plan extends the expiration date of the current plan, incorporates other minor updates and increases the share reserve of the current plan. If approved, the Amended and Restated 2009 Plan will function in a substantially similar fashion as the 2009 Plan.
Our 2009 Plan is scheduled to expire on June 10, 2019. If the Amended and Restated 2009 Plan is not approved by the stockholders, upon expiration of the 2009 Plan, we will not have any effective equity compensation plans pursuant to which we would be able to reward persons who directly or indirectly contribute to our growth and success. Our board believes that share ownership is an important factor in attracting, retaining and motivating experienced and qualified personnel for positions of substantial responsibility and encouraging such personnel to devote their best efforts to the business and financial success of and otherwise for the benefit of MercadoLibre.
Summary of the Amended and Restated 2009 Plan
The following summary of the Amended and Restated 2009 Plan is qualified in its entirety by the specific language of the Amended and Restated 2009 Plan, which is included in this proxy statement as Appendix A.
Background and Purpose. The Amended and Restated 2009 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), to our employees and for the grant of non-qualified stock options, restricted stock and common stock to our employees, directors, advisors, independent consultants and contractors. The purpose of the Amended and Restated 2009 Plan is to provide us with a means of rewarding outstanding performance to MercadoLibre and to further our growth and success of by enabling key contributors to MercadoLibre to acquire shares of our common stock, thereby increasing their personal growth and success.
Common Stock Available Under the Amended and Restated 2009 Plan. A total of 1,000,000 shares of our common stock will be reserved for issuance pursuant to the Amended and Restated 2009 Plan, of which a maximum of 1,000,000 shares may be issued pursuant to incentive stock options. Shares covered by awards that are forfeited or terminated without exercise will be available for future awards. The shares of common stock issuable under the Stock Option Plan include (1) authorized but unissued shares, (2) shares of common stock held in our treasury, (3) shares acquired by us on any stock exchange on which our shares are traded or (4) a combination of (1), (2) and (3).
Administration of the Amended and Restated 2009 Plan. The Amended and Restated 2009 Plan is administered by our board or a committee appointed by the board (the body in charge of administering the Stock Option Plan is referred to as the “administrator”). Under the Amended and Restated 2009 Plan, in selecting the administrator and the membership of any committee acting as administrator, the board is required to consider the provisions of Rule 16b-3 under the Exchange Act regarding “non-employee directors.” Under our compensation committee charter, our board has delegated to the compensation committee responsibility for administering our stock plans, which will include the Amended and Restated 2009 Plan. The administrator determines the recipients of awards, times at which awards are granted, number of shares subject to each type of award, the time for vesting of each award and the duration of the exercise period for options.
Eligibility. Stock options, restricted stock and other awards may be granted under the Amended and Restated 2009 Plan to persons who are employees and directors of MercadoLibre or any of our subsidiaries. Incentive stock options may be granted only to employees. As of December 31, 2018, we had 7,572 employees and nine directors (including one employee director).
Options. A stock option is the right to purchase shares of our common stock at a fixed exercise price for a fixed period of time. Each option is evidenced by a stock option agreement and is subject to the following terms and conditions:
Number of Options. The administrator will determine the number of shares granted to any eligible individual pursuant to a stock option.
40
Exercise Price. The administrator will determine the exercise price of options granted under our Plan at the time the options are granted, but the exercise price must be at least equal to the fair market value of our common stock on the date of grant. The exercise price of an incentive stock option granted to a 10% stockholder may not be less than 110% of the fair market value on the date such option is granted. The fair market value of the common stock generally is determined with reference to the closing sale price for the stock (or the closing bid if no sales were reported) on the day the option is granted. As of April 15, 2019, the closing price of the common stock as reported on The Nasdaq Global Select Market was $513.68 per share. The Amended and Restated 2009 Plan expressly prohibits the repricing of stock options without the approval of stockholders.
Exercise of Option; Form of Consideration. The administrator determines when options become exercisable. Vesting dates can be accelerated on the occurrence of a specified event, as provided in an Award Agreement, or can be accelerated at the discretion of the administrator. The means of payment for shares issued upon exercise of an option is determined by the administrator upon grant of the option. The Amended and Restated 2009 Plan permits payment to be made by cash, check, other shares of our common stock held by the option holder for at least six months, cashless exercises, any combination of the prior methods of payment or any other form of consideration determined by the administrator.
Term of Option. The term of stock options will be stated in the award agreement. However, the term of an stock option may not exceed ten years, except that with respect to any participant who owns 10% of the voting power of all classes of our outstanding capital stock, the term of an incentive stock option must not exceed five years. No option may be exercised after the expiration of its term.
Termination of Service. Unless otherwise determined by the administrator in its sole discretion, the unexercised portion of any option granted under the Amended and Restated 2009 Plan will automatically terminate 30 days after the participant ceases to be an employee or director as a result of a termination without cause, 10 days after the participant ceases to be an employee or director as a result of a termination with cause or resignation and 10 days after a participant ceases to be an independent consultant, contractor or advisor to us for any reason. Cause includes the conviction of a crime involving fraud, theft, dishonesty or moral turpitude, the participant’s continuous disregard of or willful misconduct in carrying lawful instructions of superiors or misconduct in carrying out his position or duties, continued use of alcohol or drugs that interfered with the performance of the participant’s duties, the conviction of participant for committing a felony or similar foreign crime, and any other cause for termination set forth in a participant’s employment agreement. In addition, unless otherwise determined by the administrator in its sole discretion, the unexercised portion of any option granted under the Amended and Restated 2009 Plan will automatically terminate three months after the death or permanent disability of a participant, or, if the participant is a party to an employment agreement, the disability of such participant as defined in the employment agreement. Other reasons for termination may be set out in the Award Agreement.
Nontransferability of Options. Unless the prior written consent of the administrator is obtained, no option can be assigned or otherwise transferred by any participant except by will or by the laws of descent and distribution. Except in the case of an approved transfer, an option may be exercised during the lifetime of a participant only by the participant or his/her legal representative if the participant is legally disabled.
Adjustments Upon the Occurrence of Material Transactions. In the event we undergo dissolution or liquidation, a reorganization, merger or consolidation in which we are not the surviving entity, or a sale of all or substantially all of our assets (each, a “Material Transaction”) holders of options will be given 10-day prior written notice and will decide within those 10 days whether to exercise their respective options. Any option that is not so exercised will terminate. However, such notice and exercise mechanism would not apply if provision is made in connection with a Material Transaction for assumption of outstanding options, or substitution of options for new options or equity securities, with any appropriate adjustments as to the number, kind and prices of shares subject to options.
Condition Specific to Incentive Stock Options. An option will not be considered an incentive stock option to the extent that the aggregate fair market value on the date of the grant of the incentive stock option of all stock with respect to which incentive stock options are exercisable for the first time by a participant during any calendar year is greater than $100,000. No option shall be affected by a change of duties or position of a participant (including transfer to our subsidiaries) as long as the participant continues to be our employee or an employee of our subsidiaries.
Restricted Stock. Restricted stock awards are awards of shares of our common stock that vest according to the terms and conditions established by the administrator. The administrator may impose whatever restrictions on transferability, risk of forfeiture and other restrictions as it determines. A holder of restricted stock has the rights of a stockholder, including the right to vote the restricted stock. During the restricted period applicable to the restricted stock, it may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered. Except as otherwise determined by the administrator, restricted stock that is subject to restrictions is subject to forfeiture upon termination of a participant’s employment.
Other Awards. Under the Amended and Restated 2009 Plan, the administrator may grant awards of common stock and other equity-based or equity-related awards in such amounts and on such terms as it shall determine, subject to the terms and conditions set forth in the Amended and Restated 2009 Plan.
41
Adjustments upon Changes in Capitalization. In the event that our stock changes by reason of a stock split, reverse stock split or recapitalization or converted into or exchanged for other securities as a result of a merger, consolidation or reorganization, the administrator will make the adjustments to the number and class of shares of common stock subject to the Amended and Restated 2009 Plan and the number, class and price of shares of common stock subject to any outstanding award. Any adjustments so made will be made in such a manner so as not to cause the award to become subject to the provisions of Section 409A of the Code or otherwise violate Section 424 of the Code.
Amendment and Termination of the Amended and Restated 2009 Plan. The Amended and Restated 2009 Plan will automatically terminate in 2029, unless we terminate it sooner. In addition, our board of directors has the authority to amend, suspend or terminate our Plan provided it does not adversely affect any award previously granted under our Plan; provided, however, that the approval by our stockholders is necessary to amend the Amended and Restated 2009 Plan if required by law or as necessary to comply with any applicable laws and regulations. In addition, no amendment will affect the terms of any award granted prior to the effectiveness of such amendment, except with the consent of the holder of the award.
U.S. Federal Income Tax Information
We are not generally eligible to take U.S. federal tax deductions in respect of compensation to our employees and none of our executives and few, if any, of our employees are U.S. taxpayers.
Restrictions on Resale
Shares of common stock acquired by participants pursuant to the Amended and Restated 2009 Plan may be resold only in compliance with the registration requirements of the Securities Act of 1933, as amended, and applicable state securities laws. If the Amended and Restated 2009 Plan is approved by the stockholders, we intend to file a Registration Statement on Form S-8 registering the 1,000,000 shares reserved for issuance under awards to be granted pursuant to the Amended and Restated 2009s Plan.
Awards Under the Amended and Restated 2009 Plan
Awards under the Amended and Restated 2009 Plan will be made at the discretion of our board, upon the recommendation of the compensation committee. Our board and compensation committee have not yet made any decisions or determinations regarding the amount and type of awards that are to be made under the Amended and Restated 2009 Plan in the future.
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth information concerning our compensation plans as of December 31, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BOARD RECOMMENDS A VOTE “FOR” THE ADOPTION OF
THE AMENDED AND RESTATED 2009 EQUITY COMPENSATION PLAN.
42
PROPOSAL FOUR: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our audit committee has appointed DeloittePistrelli, Henry Martin y Asociados S.R.L., a member firm of Ernst & Co. S.A.Young Global Limited (“Deloitte”EY”) to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2019,2022, and stockholders are being asked to ratify the selection at the 20192022 Annual Meeting. Representatives of Deloitte will notEY are expected to be present telephonically at the 2019 Annual Meeting in person. However, representatives will be present telephonicallymeeting and will have the opportunity to make a statement and respond to appropriate questions.
| | MercadoLibre 2022 Proxy Statement | | | 59 | | |
Proposal III | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2018 |
| 2017 | ||
Audit Fees |
| $ | 1,783,923 |
| $ | 1,577,210 |
Audit-Related Fees |
|
| 166,509 |
|
| 80,647 |
Tax Fees |
|
| 141,428 |
|
| 56,125 |
All Other Fees |
|
| 31,033 |
|
| 36,344 |
Total |
| $ | 2,122,893 |
| $ | 1,750,326 |
2021 2020 Audit Fees $6,208,272 $2,950,365 Audit-Related Fees 692,058 195,730 Tax Fees 282,146 17,017 All Other Fees 117,768 21,499 Total $7,300,244 $3,184,611
| | 60 | | | MercadoLibre 2022 Proxy Statement | | |
Proposal III | | |
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF EY AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. | |
| | MercadoLibre 2022 Proxy Statement | | | 61 | | |
TABLE OF THE APPOINTMENT OFDELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
CONTENTS
44
Additional Information About The Annual Meeting |
Why am I receiving these materials? |
Our board of directors is providing these proxy materials to you in connection with our board’s solicitation of proxies for use at our 2022 Annual Meeting that will take place on June 8, 2022. Stockholders are invited to attend the 2022 Annual Meeting and are requested to vote on the proposals described in this proxy statement. |
What information is contained in these materials? |
The information included in this proxy statement relates to the proposals to be voted on at the 2022 Annual Meeting, the voting process, our corporate governance practices, the compensation of our directors and our named executive officers and certain other required information. |
Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials? |
In accordance with SEC rules, we may furnish proxy materials, including this proxy statement and our 2021 Annual Report, which includes our audited consolidated financial statements for the year ended December 31, 2021, to our stockholders by providing access to these documents on the Internet instead of mailing printed copies. On or about April 27, 2022, we first mailed to our stockholders (other than those who previously requested electronic or paper delivery) a Notice of Internet Availability containing instructions on how to access our proxy materials, including our proxy statement and our 2021 Annual Report. The Notice of Internet Availability also instructs you on how to access your proxy card to vote through the Internet, by telephone or by mail. You will not receive printed copies of the proxy materials unless you request them. If you would like to receive a paper or electronic copy of our proxy materials, including a copy of our 2021 Annual Report, you should follow the instructions in the Notice of Internet Availability for requesting these materials. |
How do I get electronic access to the proxy materials? |
The Notice of Internet Availability will provide you with instructions regarding how to: |
■ | access and review our proxy materials for the 2022 Annual Meeting on the Internet; and |
■ | instruct us to send our future proxy materials to you electronically by e-mail. |
What proposals will be voted on at the 2022 Annual Meeting? |
There are three proposals scheduled for a vote at the 2022 Annual Meeting: |
■ | the election of the nominees for Class II and Class III directors recommended by our board, each to serve until the 2024 and 2025 Annual Meetings of Stockholders, respectively, or until such time as their respective successors are elected and qualified; |
■ | the approval, on an advisory basis, of the compensation of our named executive officers for fiscal year 2021; and |
■ | the ratification of the appointment of Pistrelli, Henry Martin y Asociados S.R.L., a member firm of Ernst & Young Global Limited, as our independent registered public accounting firm for the fiscal year ending December 31, 2022. |
| | 62 | | | MercadoLibre 2022 Proxy Statement | | |
Additional Information About The Annual Meeting | | |
What are our board’s voting recommendations? |
Our board recommends that you vote your shares: |
■ | “FOR”the election of the nominees for Class II and Class III directors recommended by our board; |
■ | “FOR” the approval, on an advisory basis, of the compensation of our named executive officers for fiscal year 2021; and |
■ | “FOR” the ratification of the appointment of Pistrelli, Henry Martin y Asociados S.R.L., a member firm of Ernst & Young Global Limited, as our independent registered public accounting firm for the fiscal year ending December 31, 2022. |
How many shares are entitled to vote? |
Each share of our common stock outstanding as of the close of business on April 12, 2022, the record date, is entitled to one vote at the 2022 Annual Meeting. At the close of business on April 12, 2022, 50,377,981 shares of our common stock were outstanding and entitled to vote. You may vote all of the shares owned by you as of the close of business on the record date and each share of common stock held by you on the record date represents one vote. These shares include shares that are (1) held of record directly in your name and (2) held for you as the beneficial owner through a stockbroker, bank or other nominee. |
What is the difference between holding shares as a stockholder of record and as a beneficial owner? |
Most stockholders of MercadoLibre hold their shares beneficially through a stockbroker, bank or other nominee rather than directly in their own name. There are some distinctions between shares held of record and shares owned beneficially, specifically: |
■ | Shares held of record |
■ | Shares held in brokerage account or by a bank |
Can I attend the 2022 Annual Meeting? |
You are invited to participate in the 2022 Annual Meeting if you are a stockholder of record or a beneficial owner at the close of business on April 12, 2022. Any stockholder can attend the 2022 Annual Meeting via the Internet at www.virtualshareholdermeeting.com/MELI2022. We encourage you to access the 2022 Annual Meeting online prior to its start time. Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at http://investor.mercadolibre.com. |
How can I vote my shares? |
Whether you hold shares directly as the stockholder of record or beneficially in street name, you may vote as follows: |
■ | If you are a stockholder of record, you may vote by proxy over the Internet or by telephone by following the instructions provided in the Notice of Internet Availability, or, if you requested to receive printed proxy materials, you can also vote by mail pursuant to instructions provided on the proxy card. You may also attend the Annual Meeting at 12:00 p.m., Eastern Time, on June 8, 2022 via the Internet at www.virtualshareholdermeeting.com/MELI2022 and vote during the Annual Meeting using the control number we have provided to you |
| | MercadoLibre 2022 Proxy Statement | | | 63 | | |
Additional Information About The Annual Meeting | | |
■ | If you hold shares beneficially in street name, you may also vote by proxy over the Internet or by telephone by following the instructions provided in the Notice of Internet Availability, or, if you requested to receive printed proxy materials, you can also vote by mail by following the voting instruction card provided to you by your broker, bank, trustee or nominee. |
Can I change my vote or revoke my proxy? |
If you are the stockholder of record, you may change your proxy instructions or revoke your proxy at any time before your proxy is voted at the 2022 Annual Meeting. Proxies may be revoked by any of the following actions: |
■ | filing a timely written notice of revocation with our Corporate Secretary at our principal executive office (WTC Free Zone Dr. Luis Bonavita 1294, Of. 1733, Tower II Montevideo, Uruguay, 11300); |
■ | granting a new proxy bearing a later date (which automatically revokes the earlier proxy) using any of the methods described above (and until the applicable deadline for each method); or |
■ | attending the 2022 Annual Meeting online and voting via the Internet using the control number we have provided to you (attendance at the meeting will not, by itself, revoke a proxy). |
■ | submitting new voting instructions to your broker, bank or nominee following the instructions they provided; or |
■ | if you have obtained a legal proxy from your broker, bank or nominee giving you the right to vote your shares, by attending the 2022 Annual Meeting and voting via the Internet using the control number we have provided to you (attendance at the meeting will not, by itself, revoke a proxy). |
How are votes counted? |
Election of the nominees for Class II and Class III Directors. In the election of the nominees for Class II and Class III directors, you may vote “for” any or all of the nominees for Class II and Class III directors or you may “withhold” your vote with respect to any or all of the nominees for Class II and Class III directors. Only votes “for” will be counted in determining whether a plurality has been cast in favor of a nominee for Class II and Class III directors. |
Who will count the votes? |
A representative of Broadridge will tabulate the votes at the 2022 Annual Meeting and act as the inspector of elections. |
| | 64 | | | MercadoLibre 2022 Proxy Statement | | |
Additional Information About The Annual Meeting | | |
Who will bear the cost of soliciting votes for the 2022 Annual Meeting? |
We will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. If you choose to access the proxy materials and/or vote over the Internet, you are responsible for any Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur. In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic communication by our directors, officers and employees, who will not receive any additional compensation for such solicitation activities. |
What is the quorum requirement for the 2022 Annual Meeting? |
The quorum requirement for holding the 2022 Annual Meeting and transacting business is a majority of the outstanding shares entitled to vote. The shares may be present in person or represented by proxy at the 2022 Annual Meeting. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. |
What is the voting requirement to approve each of the proposals? |
Election of the nominees for Class II and Class III Directors. The Class II and Class III directors will be elected by a plurality of the votes of the shares present in person or by means of remote communication or represented by proxy and entitled to vote on the matter, meaning that the Class II and Class III director nominees receiving the highest number of “FOR” votes will be elected. |
What are broker non-votes and what effect do they have on the proposals? |
Generally, broker non-votes occur when shares held by a broker, bank or other nominee in “street name” for a beneficial owner are not voted with respect to a particular proposal because (1) the broker, bank or other nominee has not received voting instructions from the beneficial owner and (2) the broker, bank or other nominee lacks discretionary voting power to vote those shares. A broker, bank or other nominee is entitled to vote shares held for a beneficial owner on “routine” matters without instructions from the beneficial owner of those shares, but is not entitled to vote shares held for a beneficial owner on any non-routine matter without instruction from the beneficial owner. The ratification of the appointment of our independent registered public accounting firm is considered to be a routine matter for which brokers, banks or other nominees holding shares in street name may exercise discretionary voting power in the absence of voting instructions from the beneficial owner. As a result, broker non-votes will not arise in connection with, and thus will have no effect on, this proposal. |
| | MercadoLibre 2022 Proxy Statement | | | 65 | | |
Additional Information About The Annual Meeting | | |
Where can I find the voting results of the 2022 Annual Meeting? |
We will announce final voting results in a current report on Form 8-K that will be filed with the SEC within four business days after the 2022 Annual Meeting and that will also be available on our investor relations website at http://investor.mercadolibre.com. |
| | 66 | | | MercadoLibre 2022 Proxy Statement | | |
HEADQUARTERS INFORMATION |
As of the date of this proxy statement, our board does not know of any matters to be presented at the 2019 Annual Meeting other than those specifically set forth in the Notice of 2019 Annual Meeting of Stockholders and this proxy statement. If other proper matters, however, should come before the 2019 Annual Meeting or any adjournment thereof, the proxies named in the enclosed proxy card intend to vote the shares represented by them in accordance with their best judgment in respect of any such matters.
| | MercadoLibre 2022 Proxy Statement | | | 67 | | |
STOCKHOLDER PROPOSALS FOR 2023 ANNUAL MEETING | | |
By order of the board of directors,
Marcos Galperin
Chairman of the Board, President and Chief
Executive Officer
April 26, 2019
Buenos Aires, Argentina
45
AMENDED AND RESTATED 2009 EQUITY COMPENSATION PLAN
1. PURPOSE OF THE PLAN
The purpose of the MercadoLibre, Inc. Amended and Restated 2009 Equity Incentive Plan (the “Plan”) is (i) to further the growth and success of MercadoLibre, Inc. (together with its successors and assigns, the “Corporation”) and its Subsidiaries (as defined below) by enabling directors, officers, managers, and employees of the Corporation or its Subsidiaries to acquire shares of Common Stock, U.S. $0.001 par value per share (the “Common Stock”), of the Corporation, thereby increasing their personal growth and success, and (ii) to provide a means of rewarding outstanding performance by such persons to the Corporation and its Subsidiaries. Awards to be granted under this Plan shall include, but not be limited to, (a) stock options (the “Options”), which may be, and shall be designated as, either “incentive stock options” (“ISOs”) under the provisions of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or non-qualified stock options (“NQOs”), (b) restricted stock and such other awards of Common Stock (the “Restricted Stock”) granted by the Corporation, and (c) other awards subject to such terms and conditions as the Committee shall determine (collectively referred to herein as the “Awards”). For purposes of this Plan, the term “Subsidiary” shall mean “SubsidiaryCorporation” as defined in Section 424(f) of the Code.
2. ADMINISTRATION OF THE PLAN
(a) Committee
The Plan shall be administered by the Board of Directors (the “Board”) or a committee or committees (which term includes subcommittees) appointed by, and consisting of two or more members of, the Board (the “Committee”). If and so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in selecting the Plan Administrator and the membership of any committee acting as Plan Administrator, with respect to any persons subject or likely to become subject to Section 16 of the Exchange Act, the provisions regarding “nonemployee directors” as contemplated by Rule 16b 3 under the Exchange Act. The Board may delegate the responsibility for administering the Plan with respect to designated classes of eligible persons to different committees consisting of two or more members of the Board, subject to such limitations as the Board deems appropriate. Committee members shall serve for such term as the Board may determine, subject to removal by the Board at any time.
(b) Procedures
If the Plan is administered by the Committee, the Board shall from time to time select a Chairman from among the members of the Committee. The Committee shall adopt such rules and regulations as it shall deem appropriate concerning the holding of meetings and the administration of the Plan. A majority of the entire Committee shall constitute a quorum and the actions of a majority of the members of the Committee present at a meeting at which a quorum is present, or actions approved in writing by all of the members of the Committee, shall be the actions of the Committee.
(c) Interpretation
Except as otherwise expressly provided in the Plan, the Committee shall have all powers with respect to the administration of the Plan, including, without limitation, full power and authority to interpret the provisions of the Plan and any Award Agreement (as defined in Section 5(b)), to approve the form(s) of Award Agreement(s) and other related documents used under the Plan, and to resolve all questions arising under the Plan. All decisions of the Board or the Committee, as the case may be, shall be conclusive and binding on all participants in the Plan.
3. SHARES SUBJECT TO THE PLAN
(a) Maximum Number of Shares
Subject to the provisions of Section 9 (relating to adjustments upon changes in capital structure and other corporate transactions), the maximum number of shares of Common Stock reserved and available for delivery in connection with Awards under the Plan shall be 1,000,000 shares. Shares of Common Stock underlying Awards granted under the Plan that terminate without being exercised, expire, are forfeited or canceled shall again be available pursuant to the Plan. Subject to the provisions of Section 9, in no event shall the aggregate number of shares of Common Stock which may be issued pursuant to ISOs exceed 1,000,000 shares.
(b) Character of Shares
The shares of Common Stock issuable pursuant to any Award granted under the Plan shall be (i) authorized but unissued shares, (ii) shares of Common Stock held in the Corporation’s treasury, (iii) shares acquired by the Corporation on any stock exchange in which such shares are traded, or (iv) a combination of the foregoing.
46
(c) Reservation of Shares
The number of shares of Common Stock reserved for issuance under the Plan shall at no time be less than the sum of (i) the maximum number of shares which may be purchased at any time pursuant to outstanding Options, and (ii) the maximum number of shares subject to outstanding Restricted Stock Awards.
4. ELIGIBILITY
Awards may be granted under the Plan only to (i) persons who are employees of the Corporation or any of its Subsidiaries and (ii) persons who are directors, officers or managers of the Corporation or any of its Subsidiaries. Only employees of the Corporation or any of its Subsidiaries shall be eligible for a grant of ISOs. Notwithstanding the foregoing, Awards may be conditionally granted to persons who are prospective employees, directors, officers or managers of the Corporation or any of its Subsidiaries, to take effect when such position is finalized.
5. GRANT OF AWARDS
(a) General
Awards may be granted under the Plan at any time and from time to time on or prior to the Expiration Date (as defined in Section 12). Subject to the provisions of the Plan, the Committee shall, in its discretion, determine:
|
| | | By order of the Marcos Galperin Chairman of the President and Chief Executive Office | |
| |
68 | | | MercadoLibre 2022 Proxy Statement | | |
|
|
|
|
(b) Award Agreements
Each Award granted under the Plan shall be evidenced by a written agreement, (an “Award Agreement”), containing such terms and conditions and in such form, not inconsistent with the Plan, as the Committee shall, in its discretion, provide. Each Award Agreement shall be executed by the Corporation and the Participant.
(c) No Evidence of Employment or Service
Nothing contained in the Plan or in any Award Agreement shall confer upon any Participant any right with respect to the continuation of his or her employment by or service with the Corporation or any of its Subsidiaries or interfere in any way with the right of the Corporation or any such Subsidiary at any time to terminate such employment or service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Award.
(d) Date of Grant
The date of grant of an Award under the Plan shall be the date as of which the Corporation and Participant execute and deliver an Award Agreement, or if different, the date contemplated by the Corporation for purposes of granting the Award; provided, however, that the grant shall in no event be earlier than the date as of which the Participant becomes an employee, officer, director or manager of the Corporation or one of its Subsidiaries.
6. SPECIFIC TERMSTABLE OF OPTION AWARDS
(a) OPTION PRICE
(i) General
The exercise price (the “Option Price”) for each share of Common Stock subject to an Option shall be determined by the Committee and set forth in the Award Agreement; provided, however, that such Option Price shall in no event be less than 100% (or 110% if Section 6(a)(ii) hereof applies) of the fair value of the shares of Common Stock on the date of grant (the “Fair Market Value”). For purposes of this Plan, the term “Fair Market Value” shall mean (i) the closing price of such shares on the National Association of Securities Dealers Automated Quotations (NASDAQ) market (or other national exchange on which such shares may be publicly traded) on the date of grant or (ii) in the absence of an established market for the shares, the fair market value determined in good faith by the Committee. The Committee may establish an alternative method of determining Fair Market Value. Notwithstanding the foregoing, the Committee shall, to the extent Section 409A of the Code applies, use a valuation method that satisfies Section 409A and any regulations thereunder.
CONTENTS
(ii) Incentive Stock Options
No ISO may be granted under the Plan to an employee who owns, directly or indirectly (within the meaning of Sections 422(b)(6) and 424(d) of the Code), capital stock possessing more than 10% of the total combined voting power of all classes of stock of the Corporation or any of its Subsidiaries, unless (i) the Option Price of the shares of Common Stock subject to such ISO is fixed at not less than 110% of the Fair Market Value on the date of grant of such ISO and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date it is granted.
(b) EXERCISABILITY OF OPTIONS
(i) Committee Determination
Each Option granted under the Plan shall be exercisable at such time or times, or upon the occurrence of such event or events (the “Vesting Date”), and for such number of shares of Common Stock subject to the Option, as shall be determined by the Committee and set forth in the Award Agreement evidencing such Option. If an Option is not at the time of grant immediately exercisable, the Committee may (i) in the Award Agreement evidencing such Option, provide for the acceleration of the Vesting Dates of the subject Option upon the occurrence of specified events and/or (ii) at any time prior to the complete termination of an Option, accelerate the Vesting Dates of such Option. In addition, the Committee shall have the discretion to grant Options which are exercisable for unvested shares of Common Stock.
(ii) Termination of Options
Unless otherwise determined by the Committee in its discretion, the unexercised portion of any Option granted under the Plan shall automatically terminate and shall become null and void and be of no further force or effect upon the first to occur of the following (the “Termination Date”):
(A) the tenth anniversary on which such Option is granted (or fifth anniversary if Section 6(a)(ii) hereof applies);
(B) the expiration of 30 days from the date that the Participant ceases to be an officer, manager, director, or employee of the Corporation or any of its Subsidiaries as a result of a termination without Cause (as hereinafter defined);
(C) the expiration of 10 days from the date that the Participant ceases to be an officer, manager, director, or employee of the Corporation or any of its Subsidiaries, if such termination is as a result of a termination for Cause or resignation. As used herein, “Cause” shall have the meaning ascribed to it in the service agreement between the Corporation and the applicable Participant or, if not defined therein or no such agreement exists, then it shall mean (1) the conviction of a crime involving fraud, theft, dishonesty or moral turpitude by the Participant; (2) the Participant’s willful and continuing disregard of lawful instructions of the Board of the Corporation or superiors (if any) or the Participant’s misconduct in carrying out his position and duties; (3) the continued use of alcohol or drugs by the Participant, to an extent that in the good faith determination of the Board of the Corporation, such use interferes in any manner with the performance of the Participant’s duties and responsibilities; or (4) the Participant’s violation of any law constituting a felony (including the Foreign Corrupt Practices Act of 1977) or the foreign equivalent thereof;
(D) the expiration of three (3) months from the date of such Participant’s death or permanent disability (as such term is defined in Section 22(c)(3) of the Code) or, with respect to any Participant who is a party to an employment agreement, such Participant’s disability (as such term is defined, if at all, in the relevant employment agreement);
(E) the expiration of such period of time or the occurrence of such event as the Committee in its discretion may provide in the Award Agreement;
(F) on the effective date of a Material Transaction (as defined in Section 9(c)) to which Section 9(c)(ii) (relating to assumptions and substitutions of Options) does not apply; and
(G) except to the extent permitted by Section 9(c)(ii), the date on which an Option or any part thereof or right or privilege relating thereto is transferred (otherwise than by will or the laws of descent and distribution), assigned, pledged, hypothecated, attached or otherwise disposed of by the Participant.
Anything contained in the Plan to the contrary notwithstanding, (i) an ISO granted under the Plan shall not be considered an ISO to the extent that the aggregate Fair Market Value, determined on the date of grant of such ISO, of all stock with respect to which ISOs are exercisable for the first time by such Participant during any calendar year (under all plans of the Corporation and its Subsidiaries) exceeds $100,000 and (ii) unless otherwise provided in an Option Agreement, no Option granted under the Plan shall be affected by any change of duties or position of the Participant (including a transfer to or from the Corporation or one of its Subsidiaries), so long as such Participant continues to be an employee of the Corporation or one of its Subsidiaries.
48
(iii) Termination of Employment
For purposes of this Section 6(b), with respect to both ISOs and other Options granted to employees of the Corporation or its Subsidiaries, a Participant on military leave, sick leave, or an otherwise approved leave of absence from active employment will be terminated in accordance with such policies and procedures established by the Corporation or its Subsidiaries, but such Participant will be deemed to have terminated employment no later than three months after such leave of absence commenced, or if later, the date such Participant no longer has a right to reemployment with the Corporation or its Subsidiaries which is provided either by statute or by contract.
(c) PROCEDURE FOR EXERCISE
(i) Payment
At the time an Option is granted pursuant to the Plan, the Committee shall, in its discretion, specify one or more of the following forms of payment which may be used by the Participant upon exercise of his or her Option:
(A) cash or personal or certified check payable to the Corporation in an amount equal to the aggregate Option Price of the shares of Common Stock with respect to which the Option is being exercised;
(B) stock certificates (in negotiable form) representing the shares of Common Stock that have been owned by the Participant for at least six months and that have a Fair Market Value on the date of exercise equal to the aggregate Option Price of the shares of Common Stock with respect to which the Option is being exercised;
(C) “cashless exercise” or “net exercise” but only if permitted by the Committee pursuant to such procedures as may be established by the Committee;
(D) any other consideration or in any other manner as the Committee may determine in its sole discretion; or
(E) a combination of the methods set forth in clauses (A), (B), (C) and (D) of this subsection 6(c)(i).
(ii) Notice
A Participant (or other person, as provided in Section 10(b)) may exercise an Option granted under the Plan in whole or in part (but for the purchase of whole Common Shares only), as provided in the Award Agreement evidencing his Option, by delivering a written notice (the “Notice”) to the Secretary of the Corporation, or such other officer as designated in procedures established by the Committee, on a form approved by the Committee, provided that such Participant or other person submits any required payment for such Options and otherwise complies with such other terms and conditions as the Committee shall require. The Notice shall state, or be accompanied by a writing stating, as the case may be:
(A) that the Participant elects to exercise the Option;
(B) the number of shares of Common Stock with respect to which the Option is being exercised (the “Optioned Shares”) (provided that the number of such shares shall be at least 100, unless the Option is exerciseable for less than 100 shares in which case the Option shall be exercised with respect to all of such shares);
(C) the method of payment for the Optioned Shares;
(D) the date upon which the Participant desires to consummate the purchase (which date must be prior to the termination of such Option);
(E) payment for the Optioned Shares as provided in Section 6(c)(i), unless the Participant has elected a “cashless exercise”; and
(F) such further provisions consistent with the Plan as the Committee may from time to time require.
The exercise date of an Option shall be the latest date on which the designated officer of the Corporation receives the Notice from the Participant, receives such payment as may be required for such Option, and the Participant complies with such other terms and conditions as might be required to exercise such Option. Unless expressly permitted by the Committee with respect to such Option, informal or electronic communication shall not constitute Notice to the Corporation.
49
(iii) Issuance of Shares
The Corporation shall issue shares of Common Stock to the Participant (or such other person exercising the Option in accordance with the provisions of Section 10(b)) for the Optioned Shares as soon as practicable after receipt of the Notice and payment of the aggregate Option Price for such shares of Common Stock. Neither the Participant nor any person exercising an Option in accordance with the provisions of Section 10(b) shall have any privileges as a holder of shares of Common Stock with respect to any shares of Common Stock subject to an Option granted under the Plan until the date of payment for such shares of Common Stock pursuant to the Option and the issuance of such shares of Common Stock.
(d) REPRICING
The Corporation shall, under no circumstances, reprice any Options without the approval of the Company’s stockholders. Subject to the approval of the Company’s stockholders, the Committee may, to the extent consistent with the exemption for stock options under the Section 409A regulations (if applicable), permit the voluntary surrender of all or a portion of any Option granted under the Plan to be conditioned upon the granting to the Participant of a new Option for the same or a different number of shares of Stock as the Option surrendered, or may require such voluntary surrender as a condition precedent to a grant of a new Option to such Participant. Subject to the provisions of the Plan, such new Option shall be exercisable at the same price, during such period and on such other terms and conditions as are specified by the Committee at the time the new Option is granted. Upon surrender, the Options surrendered shall be canceled and the shares of Stock previously subject to them shall be available for the grant of Awards under the Plan.
7. SPECIFIC TERMS OF RESTRICTED STOCK AWARDS
(a) Grant and Restrictions
Restricted Stock shall be subject to such restrictions, if any, on transferability, risk of forfeiture and other restrictions, as the Committee may impose, which restrictions, if any, may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Committee may determine at the date of grant or thereafter. For purposes of clarification, the Committee may grant to any Participant shares of Common Stock without any restrictions. Except to the extent restricted under the terms of the Plan and any Award Agreement relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a stockholder, including the right to vote the Restricted Stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee). During the restricted period applicable to the Restricted Stock, the Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant.
(b) Forfeiture
Except as otherwise determined by the Committee at the time of the Award, upon termination of a Participant’s employment during the applicable restriction period, the Participant’s Restricted Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Company, provided that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock.
(c) Certificates for Stock
Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Corporation retain physical possession of the certificates, and that the Participant deliver a stock power to the Corporation, endorsed in blank, relating to the Restricted Stock.
(d) Dividends and Splits
As a condition to the grant of an Award of Restricted Stock, the Committee may require that any cash dividends paid on a share of Restricted Stock be distributed in the form of additional shares of Restricted Stock but only to the extent that the shares of Restricted Stock are subject to any restrictions. Common Stock distributed in connection with a cash dividend, stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture, if any, to the same extent as the Restricted Stock with respect to which such Common Stock or other property has been distributed.
50
8. OTHER AWARDS
The Committee may from time to time grant equity-based or equity-related awards not otherwise described herein in such amounts and on such terms as it shall determine, subject to the terms and conditions set forth in the Plan. Additionally, each award shall be denominated in, or shall have a value determined by reference to, a number of shares that is specified at the time of the grant of such award.
9. ADJUSTMENTS
(a) Changes in Capital Structure
Subject to Section 9(b), if the shares of Common Stock are changed by reason of a split, reverse split or recapitalization, or converted into or exchanged for other securities as a result of a merger, consolidation or reorganization, the Committee shall make such adjustments in the number and class of shares of Common Stock with respect to which Awards may be granted under the Plan as shall be equitable and appropriate in order to make such Awards, as nearly as may be practicable, equivalent to such Awards immediately prior to such change. A corresponding adjustment increasing or decreasing the number and, if applicable, changing the class, of shares of Common Stock allocated to, and the Option Price of, each Award or portion thereof outstanding at the time of such change shall likewise be made. Such adjustments shall be made in such a manner so as not to cause the Award to become subject to the provisions of Section 409A of the Code.
(b) Incentive Stock Options
The Committee may change the terms of Options outstanding under this Plan, with respect to the Option Price or the number of shares of Common Stock subject to the Options, or both, when, in the Committee’s judgment, such adjustments become appropriate by reason of a corporate transaction (as defined in Treasury Regulation § 1.424-1(a)(1)(ii)); provided, however, that if by reason of such corporate transaction an ISO is assumed or a new option is substituted therefor, the Committee may only change the terms of such ISO such that (i) the excess of the aggregate Fair Market Value of the shares of Common Stock subject to the Option immediately after the substitution or assumption, over the aggregate option price of such shares, is not more than the excess of the aggregate Fair Market Value of all shares of Common Stock subject to the Option immediately before such substitution or assumption over the aggregate Option Price of such Shares, and (ii) the new option, or the assumption of the old ISO does not give the Optionee additional benefits which he did not have under the old ISO.
(c) Material Transactions
In the event of a dissolution or liquidation of the Corporation, a reorganization, merger or consolidation in which the Corporation is not the surviving corporation, or a sale of all or substantially all of the assets of the Corporation to another person or entity (each, a “Material Transaction”), unless otherwise provided in the Award Agreement:
|
|
|
|
|
|
(d) Special Rules
The following rules shall apply in connection with Section 9(a), (b) and (c) above:
|
|
|
|
51
|
|
|
|
10. RESTRICTIONS ON AWARDS
(a) Compliance with Securities Laws
No Awards shall be granted, and no shares of Common Stock shall be issued and delivered, unless and until the Corporation and/or the Participant shall have complied with all applicable laws, rules and regulations of all public agencies and authorities applicable to the issuance and distribution of such shares of Common Stock and to the listing of such shares of Common Stock on any stock exchange on which any of the shares of the capital stock of the Corporation may be listed. As a condition of participating in the Plan, each Participant agrees to comply with all such laws, rules and regulations and agrees to furnish to the Corporation all information and undertakings as may be required to permit compliance with such laws, rules and regulations. Any exercise of Options or grant of Restricted Stock shall be permitted only to the extent permitted by the Company’s policy regarding insider trading or any successors to that policy.
(b) Nonassignability of Option or Restricted Stock Rights
Unless the prior written consent of the Committee is obtained (which consent may be withheld for any reason), no Option granted under the Plan shall be assignable or otherwise transferable by the Participant except by will or by the laws of descent and distribution. An Option may be exercised during the lifetime of the Participant only by the Participant or such Participant’s legal representative in the event that such Participant is legally disabled. If a Participant dies, his or her Option shall thereafter be exercisable, during the period specified in Section 6(b)(ii)(D) by his or her executors or administrators to the full extent to which such Option was exercisable by the Participant at the time of his or her death. Notwithstanding anything contained in the Plan to the contrary, except as provided in an Award Agreement, any restrictions on transferability, risk of forfeiture and other restrictions on any Restricted Stock shall lapse in the event that such Participant is legally disabled or dies, and such Participant’s executors or administrators shall have all of the rights of a holder of Common Stock as of the occurrence of such disability or death.
11. EFFECTIVE DATE OF PLAN
This Plan shall become effective on the date that this Plan is approved by the Board (the “Effective Date”); provided, however, that no Award of an Option shall be exercisable by a Participant and no grant of Restricted Stock shall be made unless and until the Plan shall have been approved by the stockholders of the Corporation in accordance with the provisions of the Corporation’s articles of incorporation and by laws, which approval shall be obtained by a simple majority vote of the stockholders, voting either in person or by proxy, at a duly held stockholders’ meeting, or by written consent, within 12 months after the adoption of the Plan by the Board.
12. EXPIRATION AND TERMINATION OF THE PLAN
No Awards may be granted after the Expiration Date. The Plan shall expire on the first to occur of (i) the tenth anniversary of the Effective Date and (ii) the date as of which the Board, in its sole discretion, determines that the Plan shall terminate (the “Expiration Date”). Any Awards outstanding as of the Expiration Date shall remain in effect until the earlier of the exercise thereof or the termination or the expiration of such Awards in accordance with their respective terms.
13. AMENDMENT OF PLAN
The Board may at any time modify and amend the Plan in any respect. Notwithstanding the foregoing, the approval of the holders of a majority of the Company’s capital stock that has voting power present in person or by means of remote communication or represented by proxy at a meeting of the Company’s stockholders called for such purpose shall be obtained prior to any amendment to Section 6(d) becoming effective and prior to any other amendment becoming effective if such approval is required by law, the rules and regulations of any stock exchange on which the Company’s stock is listed or is necessary to comply with regulations promulgated by the Securities and Exchange Commission under Section 16(b) of the Securities Exchange Act of 1934, as amended or Section 422 of the Code or the regulations promulgated by the Treasury Department thereunder. No such amendment to the Plan shall affect the terms or provisions of any Award granted by the Corporation prior to the effectiveness of such amendment unless otherwise agreed to by the holder thereof.
14. CAPTIONS
The use of captions in the Plan is for convenience. The captions are not intended to provide substantive rights.
52
15. ACCOUNTS AND STATEMENTS
The Corporation shall maintain records of the shares of Common Stock held by each Participant and the details of each Award granted to the Participant, including (i) the number of shares of Common Stock subject to the Award; (ii) the number of shares of Common Stock subject to, and the Option Price of, each Option; (iii) the number of shares of Common Stock in respect of which the Option has been exercised; (iv) the dates of such exercise; and (v) the maximum number of shares of Common Stock which the Participant may still purchase under the Option.
16. WITHHOLDING TAXES
Whenever under the Plan shares of Common Stock are to be delivered by a Participant upon grant of a Restricted Stock Award or upon exercise of an Option, the Corporation shall be entitled to require as a condition of delivery that the Participant remit or, in appropriate cases, agree to remit if and when due, an amount sufficient to satisfy any and all current or estimated future tax obligations, whether in the United States or otherwise, including, but not limited to, Federal, state and local income tax withholding obligations and/or the employee’s portion of any employment tax requirements relating thereto and any other tax obligations or requirements of any applicable jurisdiction or taxing authority.
17. OTHER PROVISIONS
Each Award granted under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion. If Option Shares acquired by the exercise of an ISO granted under this Plan are disposed of within two years following the date of grant of the ISO or one year following the issuance of the Option Shares to the Participant (a “Disqualifying Disposition”), the holder of the Option Shares shall, immediately prior to such Disqualifying Disposition, notify the Corporation in writing of the date and terms of such Disqualifying Disposition and provide such other information regarding the Disqualifying Disposition as the Corporation may reasonably require.
18. SECTION 409A
Unless otherwise expressly provided for in an Award Agreement, the Plan and each Award Agreement will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Board or Committee determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six months following the date of such Participant’s “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.
19. NUMBER AND GENDER
With respect to words used in the Plan, the singular form shall include the plural form, the masculine gender shall include the feminine gender, and vice-versa, as the context requires
20. GOVERNING LAW
The validity and construction of the Plan and the instruments evidencing the Awards granted hereunder shall be governed by the laws of the State of Delaware.
As adopted by the Board of Directors
of MercadoLibre, Inc.
on April 24, 2019.
53
54
55