UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ⌧ Filed by a Party other than the Registrant ◻
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☑ | Filed by the Registrant | ☐ | Filed by a Party other than the Registrant | |
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☐ | Preliminary Proxy Statement | |||
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| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
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| ☐ | Soliciting Material Pursuant to §240.14a-12 |
MercadoLibre, Inc.
MERCADOLIBRE, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||||
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April 29, 2021
Arias 3751, 7th Floor
Buenos Aires, Argentina C1430CRG
April 26, 2019
Dear Stockholder:
You are cordially invited to attend the 20192021 Annual Meeting of Stockholders of MercadoLibre, Inc., which will be held virtually at 12:00 p.m., Eastern Time, on Monday,Tuesday, June 10, 2019. We are pleased to note that this year’s annual meeting will be a completely virtual meeting of stockholders.8, 2021. You will be able to attend the 20192021 Annual Meeting vote, and submit your questions during the meeting via the Internet by visitingwww.virtualshareholdermeeting.com/MELI2019MELI2021.
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, 2019,29, 2021, we first mailed to our stockholders a Notice of Internet Availability containing instructions on how to access our 20192021 Proxy Statement and 20182020 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 20182020 Annual Report.
Thank you
2020 marked a turning point on a global scale. We have all been living moments of uncertainty, with unexpected changes and great challenges. In this context, MercadoLibre became an essential service and had to ensure that many important contributions to people’s lives arrived through our services. 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 look forwardknow that the world needs transformation. That is why we want to your attendance atbe better every day, taking into account the 2019 Annual Meetinggrowth of Stockholders or receiving your proxy vote. our business and its environmental impact and social role.
On behalf of the board of directors, I would like to express our appreciation for your continued interest in MercadoLibre. We look forward to your attendance at the 2021 Annual Meeting of Stockholders or receiving your proxy vote.
Sincerely yours,
/s/ Marcos Galperin
Marcos Galperin
Chairman of the Board, President and Chief Executive Officer
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MercadoLibre 2021 Proxy Statement | 3 |
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 2019of Annual Meeting of Stockholders of MercadoLibre, Inc. (the “2019 Annual Meeting”) willto be held at 12:00 p.m., Eastern Time, on June 10, 2019. The Annual 8, 2021
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:information
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The 2021 Annual Meeting of Stockholders of MercadoLibre, Inc. (the “2021 Annual Meeting”) will be held at 12:00 p.m., Eastern Time, on June 8, 2021. | |||||
The Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/MELI2021, where stockholders will be able to listen to the meeting live, submit questions and vote online. | |||||
Items of business: | |||||
111 | To elect the |
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121 | To approve, on an advisory basis, the compensation of our named executive officers for fiscal year |
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| To ratify the appointment of Deloitte & Co. S.A. as our independent registered public accounting firm for the fiscal year ending December 31, |
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141 | 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
Record date
Our board of directors has fixed the close of business on April 12, 2021 as the record date for determining the stockholders entitled to notice of and to vote at the 2021 Annual Meeting. Only stockholders of record as of the close of business on April 12, 2021 are entitled to notice of and to vote at the 2021 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 card or voting instruction card.
Whether or not you plan to attend the meeting, please read our 20192021 Proxy Statement for important information on each of the proposals, and our practices in the areas of corporate governance and executive compensation. Our 20182020 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.
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| By order of the board of directors,
/s/ Jacobo Cohen Imach
Jacobo Cohen Imach Sr. Vice President, General Counsel and Secretary |
Important Notice Regarding the Availability of Proxy Materials for the 2019 Annual Meeting.IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2021 ANNUAL MEETING. The Notice of Meeting and Proxy Statement for the 2019 Annual Meeting and our 2018 Annual Report to Stockholders are available electronically at THE NOTICE OF MEETING AND PROXY STATEMENT FOR THE 2021 ANNUAL MEETING AND OUR 2020 ANNUAL REPORT TO STOCKHOLDERS ARE AVAILABLE ELECTRONICALLY ATwww.proxyvote.com www.proxyvote.com..
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MercadoLibre 2021 Proxy Statement | 4 |
MercadoLibre, Inc.TABLE OF Arias 3751, 7th FloorCONTENTSBuenos Aires, Argentina C1430CRG
MercadoLibre 2021 Proxy Statement | 5 |
PROXY STATEMENT
INTERNET AVAILABILITY OF PROXY
MATERIALS
Under 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, 2019,29, 2021, 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, 20182020 (“20182020 Annual Report”). The Notice of Internet Availability also instructs you on how to access your proxy card to vote through the Internet or by telephone.
This process is designed to expedite stockholders’ receipt of proxy materials, lower the cost of the annual meeting and help conserve natural resources. However, if you would prefer to receive printed proxy materials, please follow the instructions included in the Notice of Internet Availability. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials via e-mail unless you elect otherwise.
ATTENDING THE 20192021 ANNUAL MEETING
Listening on the Internet
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Live webcast available at www.virtualshareholdermeeting.com/ |
| Webcast starts at 12:00 p.m., June 8, 2021 Eastern Time |
| Replay available until June |
QUESTIONS
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Voting Stock Ownership | Computershare
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) | |||||
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MercadoLibre 2021 Proxy Statement | 6 |
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QUESTIONS AND ANSWERS ABOUT THE
PROXY MATERIALS AND OUR 2019 2021
ANNUAL MEETING
Q:Why am I receiving these materials?
A: Our board of directors is providing these proxy materials to you in connection with our board’s solicitation of proxies for use at our 2019 Annual Meeting which will take place on June 10, 2019. Stockholders are invited to attend the 2019 Annual Meeting and are requested to vote on the proposals described in this proxy statement.
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 statements for the year ended December 31, 2018, to our stockholders by providing access to these documents on 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.
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:
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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 2021 Annual Meeting that will take place on June 8, 2021. Stockholders are invited to attend the 2021 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 2021 Annual Meeting, the voting process, 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 2020 Annual Report, which includes our audited consolidated financial statements for the year ended December 31, 2020, to our stockholders by providing access to these documents on the Internet instead of mailing printed copies. On or about April 29, 2021, 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 2020 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 2020 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: | |||
view our proxy materials for the |
| instruct us to send our future proxy materials to you electronically by e-mail. |
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:
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. | |||
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What proposals will be voted on at the 2021 Annual Meeting? | |||
There are three proposals scheduled for a vote at the 2021 Annual Meeting: | |||
the election of the |
| the approval, on an advisory basis, of the compensation of our named executive officers for fiscal year |
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| the ratification of the appointment of Deloitte & Co. S.A. as our independent registered public accounting firm for the fiscal year ending December 31, |
MercadoLibre 2021 Proxy Statement | 7 |
Q:What are our board’s voting recommendations?
A: Our board recommends that you vote your shares:
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What are our board’s voting recommendations? | ||
Our board recommends that you vote your shares: | ||
“FOR” the election of the |
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How many shares are entitled to vote? | |||
Each share of our common stock outstanding as of the close of business on April 12, 2021, the record date, is entitled to one vote at the 2021 Annual Meeting. At the close of business on April 12, 2021, 49,852,319 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 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, you have the right to direct your broker or other nominee on how to vote the shares in your account. | |||
Can I attend the 2021 Annual Meeting? | |||
You are invited to participate in the 2021 Annual Meeting if you are a stockholder of record or a beneficial owner at the close of business on April 12, 2021. Any stockholder can attend the 2021 Annual Meeting via the Internet at www.virtualshareholdermeeting.com/MELI2021. 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 many shares are entitled to vote?
A: Each share of 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 date and the date of the Annual Meeting). 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.
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:
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MercadoLibre 2021 Proxy Statement | 8 |
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 |
| 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. | ||
Under Delaware law, votes cast by Internet or telephone have the same effect as votes cast by submitting a written proxy card. |
Under Delaware law, votes cast by Internet or telephone have the same effect as votes cast by submitting a written proxy card.
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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:
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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 2021 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 |
| 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 |
If your shares are held through a brokerage account or by a bank or other nominee, you may change your vote by:
If your shares are held through a brokerage account or by a bank or other nominee, you may change your vote by: | ||
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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 | ||
How are votes counted? | |||
Election of two Class II Directors. In the election of two Class II directors, you may vote “for” any or all of the nominees for Class II directors or you may “withhold” your vote with respect to any or all of the nominees for Class II director. Only votes “for” will be counted in determining whether a plurality has been cast in favor of a nominee for Class II director. | |||
Advisory Vote to Approve our Named Executive Officers’ Compensation for 2020. In the approval, on an advisory basis, of the compensation of our named executive officers for fiscal year 2020, 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. | |||
Ratification of Appointment of Independent Auditor. In the proposal to ratify the appointment of our independent registered public accounting firm for 2021, you may vote “for,” “against” or “abstain.” If you abstain from voting, it will have the same effect as a vote against this proposal. |
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.
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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 be available on our investor relations website at http://investor.mercadolibre.com.
Q: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.
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MercadoLibre 2021 Proxy Statement | 9 |
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 two Class II directors nominated and recommended by our board and named in this proxy statement, “FOR” approval of the compensation of our named executive officers, “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 2021 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?” | |
Who will count the votes? | |
A representative of Broadridge will tabulate the votes at the 2021 Annual Meeting and act as the inspector of elections. | |
What is the quorum requirement for the 2021 Annual Meeting? | |
The quorum requirement for holding the 2021 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 2021 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 two Class II Directors. The Class II 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 two Class II director nominees receiving the highest number of “FOR” votes will be elected. | |
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MercadoLibre 2021 Proxy Statement 109
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. Unlike the proposal to ratify the appointment of our independent auditors, the election of directors and the advisory vote on our named executive officers’ compensation for fiscal year 2020 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 2020 will have no effect on these proposals. | |
Where can I find the voting results of the 2021 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 2021 Annual Meeting and that will also be available on our investor relations website at http://investor.mercadolibre.com. | |
Who will bear the cost of soliciting votes for the 2021 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. |
Links to websites included in this proxy statement are provided solely for convenience purposes. Content on the websites, including content on our Company website, is not, and shall not be deemed to be, part of this proxy statement or incorporated herein or into any of our other filings with the SEC.
MercadoLibre 2021 Proxy Statement | 11 |
PROPOSAL ONE:
ELECTION OF THREETWO CLASS IIIII DIRECTORS
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 nineeight 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:
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Class I | Susan Segal |
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Mario Eduardo Vázquez | ||||
Alejandro Nicolás Aguzin |
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Class II | Nicolás Galperin
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Meyer Malka | ||||
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Class III | Emiliano Calemzuk |
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Marcos Galperin | ||||
Roberto Balls Sallouti |
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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—Director Independence and Family Relationships,” our board has determined that sevensix of the nineeight current members of our board are independent directors within the meaning of the listing standards of The NASDAQ Global Select Market (the “NASDAQ”) and our corporate governance guidelines.
The terms of our threetwo Class IIIII directors are set to expire at the 20192021 Annual Meeting. The nominating and corporate governance committee recommended, and our board nominated, each of Emiliano Calemzuk, MarcosNicolás Galperin and Roberto Balls Sallouti as nomineesnominee for re-election as a Class III directorsII director of our Company. Mr. Malka has chosen to not run for re-election to serve on the Board of Directors. Mr. Malka is relinquishing his position at the end of his current term, which coincides with the date of the Annual Meeting. Mr. Malka has served on the Board of Directors since 2013, providing years of valuable contributions to the Company. Mr. Malka’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. The nominating and corporate governance committee recommended, and our board nominated Henrique Dubugras as nominee for election as a Class II director of our Company at the 20192021 Annual Meeting. If elected at the 20192021 Annual Meeting, each of the Class IIIII director nominees 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.
If any of the nominees is unexpectedly unavailable for election, shares represented by validly delivered proxies will be voted for the election of a substitute nominee proposed by our nominating and corporate governance committee or our board may determine to reduce the size of our board. Each person nominated for election and named above has agreed to serve if elected.
Set forth below is biographical information for the nominees, as well as the key attributes, experience and skills that the board believes each nominee brings to the board.
MercadoLibre 2021 Proxy Statement | 12 |
Nominees for Election as Class IIIII Directors
Class II Directors
Experience: 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: 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. 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. | |
Nicolás Galperin, 52 | |
Director since: 1999 | |
MercadoLibre, Inc.’s Board Committees: None |
MercadoLibre 2021 Proxy Statement | 13 |
Experience: 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 Pagre.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: Mr. Dubugras brings a deep understanding of financial tools and services that provide critical insights to our business. Mr. Dubugras’ experience with innovation in the start-up space promises to introduce new and creative ideas for our growth and place in an evolving world. 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. | ||
Henrique Dubugras, 25 MercadoLibre, Inc.’s Board Committees: None | ||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION |
MercadoLibre 2021 Proxy Statement | 14 |
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 in the same location of our website.
MercadoLibre 2021 Proxy Statement | 15 |
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.
Experience: 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. 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: 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, finance, 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. | |
Susan Segal, 68 | |
Director since: 2012 | |
MercadoLibre, Inc.’s Board Committees: | |
Audit Committee Compensation Committee (effective as of the Annual Meeting) |
MercadoLibre 2021 Proxy Statement | 16 |
Experience: 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. Key Attributes 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. | |||
Mario Eduardo Vásquez, 85 | |||
Director since: 2008 | |||
MercadoLibre, Inc.’s Board Committees: | |||
Audit Committee (Chairman, Financial Expert) | |||
Nominating and Corporate Governance Committee | |||
Compensation Committee | |||
MercadoLibre 2021 Proxy Statement | 17 |
Experience: As of May 24, 2021, Mr. Aguzin is the president of the Hong Kong Stock Exchange. 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 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: 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. | |
Alejandro Nicolás Aguzin, 52 | |
Director since: 2017 | |
MercadoLibre, Inc.’s Board Committees: | |
Audit Committee (effective as of the Annual Meeting) Nominating and Corporate Governance Committee |
MercadoLibre 2021 Proxy Statement | 18 |
Class IIIII 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.
Experience: 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: 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. 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. | |
Nicolás Galperin, 52 | |
Director since: 1999 | |
MercadoLibre, Inc.’s Board Committees: None |
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MercadoLibre 2021 Proxy Statement | 13 |
Experience: 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 Pagre.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 Mr. Dubugras brings a deep understanding of financial tools and services that provide critical insights to our business. Mr. Dubugras’ experience with innovation in the start-up space promises to introduce new and creative ideas for our growth and place in an evolving world. 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. | ||
Henrique Dubugras, 25 MercadoLibre, Inc.’s Board Committees: None | ||
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.
MercadoLibre 2021 Proxy Statement 14 DIRECTORS AND CORPORATE GOVERNANCEMarcos 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 Class11
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.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.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 onin the same location of our website.
MercadoLibre 2021 Proxy Statement | 15 |
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.
Experience: 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. 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: 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, finance, 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. Susan Segal, 68 Director since: 2012 MercadoLibre, Inc.’s Board Committees: Audit Committee Compensation Committee (effective as of the Annual Meeting) MercadoLibre 2021 Proxy Statement 16 Experience: 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. Key Attributes 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. Mario Eduardo Vásquez, 85 Director since: 2008 MercadoLibre, Inc.’s Board Committees: Audit Committee (Chairman, Financial Expert) Nominating and Corporate Governance Committee Compensation Committee MercadoLibre 2021 Proxy Statement 17 Experience: As of May 24, 2021, Mr. Aguzin is the president of the Hong Kong Stock Exchange. 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 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: 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. Alejandro Nicolás Aguzin, 52 Director since: 2017 MercadoLibre, Inc.’s Board Committees: Audit Committee (effective as of the Annual Meeting) Nominating and Corporate Governance Committee MercadoLibre 2021 Proxy Statement 18 Class II Directors Experience: 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: 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. 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. Nicolás Galperin, 52 Director since: 1999 MercadoLibre, Inc.’s Board Committees: None MercadoLibre 2021 Proxy Statement 13 Experience: 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 Pagre.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: Mr. Dubugras brings a deep understanding of financial tools and services that provide critical insights to our business. Mr. Dubugras’ experience with innovation in the start-up space promises to introduce new and creative ideas for our growth and place in an evolving world. 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. Henrique Dubugras, 25 MercadoLibre, Inc.’s Board Committees: None THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION MercadoLibre 2021 Proxy Statement 14 DIRECTORS AND CORPORATE GOVERNANCE Our business is managed by our employees under the direction and MercadoLibre 2021 Proxy Statement 15 The following is biographical information on the remainder of our continuing directors, as well as the key attributes, experience and Experience: 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. 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: 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, finance, 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. Susan Segal, 68 Director since: 2012 MercadoLibre, Inc.’s Board Committees: Audit Committee Compensation Committee (effective as of the Annual Meeting) MercadoLibre 2021 Proxy Statement 16 Experience: 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. Key Attributes 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. Mario Eduardo Vásquez, 85 Director since: 2008 MercadoLibre, Inc.’s Board Committees: Audit Committee (Chairman, Financial Expert) Nominating and Corporate Governance Committee Compensation Committee MercadoLibre 2021 Proxy Statement 17 Experience: As of May 24, 2021, Mr. Aguzin is the president of the Hong Kong Stock Exchange. 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 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: 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. Alejandro Nicolás Aguzin, 52 Director since: 2017 MercadoLibre, Inc.’s Board Committees: Audit Committee (effective as of the Annual Meeting) Nominating and Corporate Governance Committee MercadoLibre 2021 Proxy Statement 18 Class III Directors Experience: 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 Jeff Sagansky’s and Harry Sloan’s special purpose acquisition company, Silver Eagle Acquisition Company, as the target company’s Chief Executive Officer. 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: 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. Emiliano Calemzuk, 47 Director since: 2007 Lead independent director since 2016 MercadoLibre, Inc.’s Board Committees: Nominating and Corporate Governance Committee (Chairman) Compensation Committee (Chairman effective as of the Annual Meeting) MercadoLibre 2021 Proxy Statement 19 Experience: Mr. Galperin serves on the boards of Televisa, a media company in Mexico and Onapsis, a cyber-security company. He also served as a director of Globant S.A. (NYSE: GLOB) until his resignation in April 2020. 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 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. Marcos Galperin, 49 Director since: 1999 Chairman of the Board, President, co-founder and CEO MercadoLibre, Inc.’s Board Committees: None MercadoLibre 2021 Proxy Statement 20 Experience: 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 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. Roberto Balls Sallouti, 49 Director since: 2014 MercadoLibre Inc.’s Board Committees: None MercadoLibre 2021 Proxy Statement 21 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 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. Board Leadership StructureMario 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 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.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 theVenezuelan
OF THE NOMINEES FOR CLASS II DIRECTORS NAMED ABOVEU.S. markets, where he served asoversight of our board. Except for our 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 oneexecutive officer, none of the largest private microfinance institutionsmembers 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 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:board committee meetings.Mr. Malka is an entrepreneur who brings deep industry expertiseWe believe open, effective, and expansive operational experienceaccountable corporate governance practices are key to our board. Herelationship with our stockholders. Our board has spent his careeradopted 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 in the financial products and payments industries, and he has gained deep understandingsame location 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.website.Key Attributes, Experience and Skills:Mr. Olivan contributes extensive knowledge in creatingBoard of Directorsgrowing internet usage acrossskills that the globe and over various platforms (web and mobile). He also has a deep understanding of how social networks work, which uniquely positions himboard believes such continuing directors bring to provide thoughtful counsel to us as we explore opportunities at the intersection of commerce and social media.board.company.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 board has determined that Mr. Dubugras will also be considered an independent director if he is elected at the Annual Meeting. 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.14
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 companyCompany and our stockholders. Mr. Galperin co-founded our company,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.
MercadoLibre 2021 Proxy Statement | 22 |
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.
Anti-hedging and anti-pledging policies
Our directors and employees (including officers) and any of their designees are prohibited from engaging in hedging transactions with respect to Company securities, including through the use of derivative instruments or through the establishment of a short position in the Company’s securities. In addition, directors and employees (including officers) and any of their designees are prohibited from pledging Company securities as collateral for a loan or from holding Company securities in a margin account.
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, 7thPasaje Posta 4789, 6th Floor, Buenos Aires, Argentina, C1430CRG.C1430EKG. The nominating and corporate governance committee has delegated responsibility for initial review of stockholder communications to our managerhead of investor relations.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 managerour head of investor relationsInvestor 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. NoThree members of our board of directors were able to attendattended our 20182020 Annual Meeting of Stockholders in person.Stockholders.
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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.
MercadoLibre 2021 Proxy Statement | 23 |
Outside Advisors
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 employeesdirectors, executives and directors.employees.
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 companyCompany 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,team, 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 20182020 and 20172019 and our policy on pre-approval of non-audit services are described under the section below entitled “Proposal Four:Three: Ratification of Independent Registered Public Accounting Firm.”
We have establishedan anonymous and confidential whistleblower hotline for employees and third parties to report illegal or non-ethical behaviors. Complaints received through the hotline are analyzed and investigated by a corporate telephone hotlinecompliance team appointed by the Head of Risk and Internet siteCompliance to allowthat effect. If the investigation confirms any employeewrongdoing, a report is issued with a recommendation of corrective actions that aim to confidentiallyremedy the situation and/or identify and anonymously lodge a complaint aboutcontrol any accounting, internal control, auditing or other matter of concern.irregularities. In turn, the Company’s Management will follow the recommendations in the report by implementing those remediate actions.
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MercadoLibre 2021 Proxy Statement | 24 |
Affirmation of our ESG Practices and Performance
Our work on environmental, social and governance (ESG) matters has resulted in greater disclosure surrounding our ongoing practices. Since 2012, we have published an Impact Report, which shares the progress of our ESG commitments. Our 2020 Impact Report is available on our website:https://sustentabilidadmercadolibre.com/en.
MercadoLibre 2021 Proxy Statement | 25 |
Board committees help our board perform effectively and efficiently, but do not replace the oversight responsibility 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:committees as of the filing date of this Proxy Statement:
| ||||||
| Audit |
| Compensation |
| Nominating & | |
Emiliano Calemzuk* |
|
|
|
|
| Chair |
Meyer Malka* |
|
|
| Chair |
|
|
Susan Segal* |
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|
|
|
|
Mario Vázquez* |
| Chair |
|
|
|
|
Nicolás Aguzin* |
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|
|
|
|
|
The following table lists the members of each of our three principal standing board committees as of the Annual Meeting:
Audit | Compensation | Nominating & | ||||
Emiliano Calemzuk* | Chair | Chair | ||||
Susan Segal* | ● | ● | ||||
Mario Vázquez* | Chair | ● | ● | |||
Nicolás Aguzin* | ● | ● |
*Independent Director.
MercadoLibre 2021 Proxy Statement | 26 |
Audit Committee
The audit committee, which met foursix times and took sevenfour actions by unanimous written consent during fiscal year 2018,2020, is comprised of Mr. Vázquez (Chairman), Mr. Malka and Ms. Segal. Following the Annual Meeting, the audit committee will be comprised of Mr. Vázquez (Chairman), Mr. Aguzin and Ms. Segal. Our board has determined that each of the directors serving on our audit committee (or that will be serving on our audit committee following the Annual Meeting) is independent as defined under the rules of the SEC and as defined in the Listing Rules of NASDAQ, and that, based on his professional qualifications and experience described above, Mr. Vázquez is an “audit committee financial expert,” as defined under the rules of the SEC. The audit committee is responsible for:
· | 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. |
For more information, please see “Audit Committee Report” beginning on page 3954 of this proxy statement.
Our board has adopted a written charter for our audit committee, which is posted on our investor relations website at http://investor.mercadolibre.com.
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MercadoLibre 2021 Proxy Statement | 27 |
The compensation committee, which met twiceone time and took one actionthree actions by unanimous written consent during fiscal year 2018,2020, is comprised of Messrs. Malka (Chairman), Calemzuk and Vazquez. Following the Annual Meeting, the compensation committee will be comprised of Messrs. Calemzuk (Chairman) and Vazquez and Ms. Segal. Our board has determined that each of the directors serving on our compensation committee (or that will be serving on our compensation committee following the Annual Meeting) is independent as defined in the Listing Rules of NASDAQ. Pursuant to its charter, the compensation committee is responsible for:
· | 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. |
Our board has adopted a written charter for our compensation committee, which is posted on our investor relations website at http://investor.mercadolibre.com.investor.mercadolibre.com.
Nominating and Corporate Governance Committee
The nominating and corporate governance committee, which met oncetwice during fiscal year 2018,2020, 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:
· | 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. |
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.
MercadoLibre 2021 Proxy Statement | 28 |
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:
· | 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. |
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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.
MercadoLibre 2021 Proxy Statement | 29 |
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.com.
Director Candidate Recommendations and Nominations by Stockholders.The nominating and corporate governance committee’s charter provides that the committee will consider director candidates recommended by stockholders. The charter of the nominating and corporate governance committee provides that it will evaluate all candidates for election to our board, regardless of the source from which the candidate was first identified, based on the totality of the merits of each candidate and not based upon minimum qualifications or attributes. Stockholders should submit any such recommendations for the consideration of our nominating and corporate governance committee through the method described under “Stockholder Communications” above. In addition, any stockholder of record entitled to vote for the election of directors may nominate persons for election to our board if that stockholder complies with the notice procedures summarized in “Stockholder Proposals for 20202022 Annual Meeting” beginning on page 4557 of this proxy statement.
Process for Identifying and Evaluating Director Candidates.The nominating and corporate governance committee evaluates all director candidates in accordance with the criteria described in our corporate governance guidelines and the nominating and corporate governance committee charter. The committee evaluates any candidate’s qualifications to serve as a member of our board based on the skills and characteristics of individual board members as well as the composition of our board as a whole. In addition, the nominating and corporate governance committee will evaluate a candidate’s independence, skills, experience, reputation, integrity, potential for conflicts of interest and other appropriate qualities in the context of our board’s needs.
Director diversity.We do not have a formal policy about diversity of our board membership, but the nominating and corporate governance committee will consider a broad range of factors when nominating individuals for election as directors, including differences of viewpoint, professional experience, education, skill, other personal qualities and attributes, race, gender and national origin. The nominating and corporate governance committee neither includes nor excludes any candidate from consideration solely based on the candidate’s diversity traits.
Directors Attendance at Meetings of our Board of Directors
Our board held five meetings and took fiveten actions by written consent during the fiscal year ended December 31, 2018.2020. All of our directors attended 75% or more of the aggregate of all meetings of the board of directors and the board committees on which they served during 2018.2020.
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 2018,2020, 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, in the amount of: $15,000 to the chair of the nominating and corporate governance committee of the Board, $30,000 to lead independent director of the Board, $21,913 to the chair of the audit committee of the Board and $21,913 to the chair of the compensation committee of the Board. Both the cash and equity-based compensation is subject to forfeiture in the event that any independent director does not complete the full year of service for which such compensation is due.
The compensation committee periodically reviews our director compensation policy with the primary objective of matching compensation levels to the relative demands associated with serving on our board and its various committees. The compensation committee will review the Director Compensation Program for the period after June 10, 2019.
Directors who are not classified as independent directors by our board do not receive any compensation for their service as directors on our board. We reimburse our non-employee directors for travel and other reasonable out-of-pocket expenses incurred in attending meetings of our board and its committees.
MercadoLibre 2021 Proxy Statement | 31 |
Director Compensation for 20182020
The following table summarizes compensation earned by our non-employee directors for the fiscal year ended December 31, 2018:
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
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)2020. 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.directors, and is not included in this table.
Name |
|
| Fees Earned or Paid in Cash (1) |
|
| Stock Awards (2) |
|
| Total |
Emiliano Calemzuk |
| $ | 117,093 |
| $ | 119,907 |
| $ | 237,000 |
Meyer Malka |
|
| 94,006 |
|
| 119,907 |
|
| 213,913 |
Susan Segal |
|
| 72,093 |
|
| 119,907 |
|
| 192,000 |
Mario Eduardo Vázquez |
|
| 94,006 |
|
| 119,907 |
|
| 213,913 |
Roberto Balls Sallouti |
|
| 72,093 |
|
| 119,907 |
|
| 192,000 |
Alejandro Nicolás Aguzin |
|
| 72,093 |
|
| 119,907 |
|
| 192,000 |
Total |
| $ | 521,384 |
| $ | 719,442 |
| $ | 1,240,826 |
(1) | The amounts in this column include all fees earned for calendar year 2020, 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. As a result, the amounts include (i) the portion of the fees earned under the 2020 Director Compensation Program for the period June to December, 2020 and (ii) the portion of the fees earned under the 2019 Director Compensation Program for the period January to June, 2020. |
(2) | The amounts in this column include the fair value at the grant dates for stock awards earned during the calendar year 2020. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership of our common stock with the SEC. Officers, directors and greater-than-10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports that they file.
Delinquent Section 16(a) Reports
Based solely upon review of the copies of such reports furnished to us or prepared by us and written representations that no other such reports were required, we believe that during the period from January 1, 20182020 through December 31, 2018,2020, all Section 16(a) filing requirements applicable to our officers, directors and greater-than-10% beneficial owners were complied with on a timely basis, with the exception of one transaction for Mr. Calemzuk whichMarcos Galperin that was reported on a Form 45 filed on April 10, 2019.February 2, 2021.
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MercadoLibre 2021 Proxy Statement | 32 |
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.April 29, 2021.
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Name |
|
| Age |
|
| Position |
Marcos Galperin |
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|
|
|
| Chairman of the Board, President and Chief Executive Officer |
Pedro Arnt |
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|
|
|
| Executive Vice President and Chief Financial Officer |
Stelleo Tolda |
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| 53 | Commerce President | ||
Osvaldo Giménez | 51 | Fintech President | ||||
Daniel Rabinovich | 43 |
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| Executive Vice President and Chief Operating Officer | ||
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Marcelo Melamud |
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| Senior Vice President and Chief Accounting Officer |
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 | |
Stelleo Toldahas been our Commerce President since August 2020. Prior to this position, from 2019 until August 2020, Mr. Tolda was our Chief Operating Officer (Commerce), and from 2009 until 2019, our Chief Operating Officer. Prior to this appointment, he 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. |
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.
Daniel 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.
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MercadoLibre 2021 Proxy Statement | 33 |
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 Rabinovichhas 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 Buenos Aires University with a degree in information systems. | |
Marcelo Melamudis 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. |
MercadoLibre 2021 Proxy Statement | 34 |
BENEFICIAL OWNERSHIP OF OUR COMMON STOCK
The following tables set forth information, as of April 15, 2019,12, 2021, regarding the beneficial ownership of our common stock. This information is based solely on SEC filings made by the individuals and entities by that date and upon information submitted to us by our directors, director nominee and executive officers.officers, and includes:
· each person that is known by us to be a beneficial owner of more than 5% of our outstanding equity securities; |
· each of our named executive officers; |
· each of our |
· all directors and executive officers as a group. |
Except as indicated in the footnotes to this table, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares shown as beneficially owned by the stockholder. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days of the date of this proxy statement are considered outstanding and beneficially owned by the person holding the options for the purposes of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless indicated otherwise in the footnotes, the address of each individual listed in the table is c/o MercadoLibre, Inc., Arias 3751, 7thPasaje Posta 4789, 6th Floor, Buenos Aires, Argentina, C1430CRG.C1430EKG.
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| |||||
|
| Total Common Stock (1) |
| Total Common Stock (1) |
| |||||
Name and Address of Beneficial Owner |
| Number |
| Percentage |
| Number |
| Percentage | ||
Five percent stockholders (1): |
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| ||||||
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| |||||
Five percent stockholders (1): |
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| ||||||
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| |||||
Baillie Gifford & Co. (2) |
| 5,208,620 |
| 10.56 | % |
| 4,751,724 |
| 9.53 % |
|
Galperin Trust (3) |
| 4,000,000 |
| 8.11 | % |
| 3,900,000 |
| 7.82 % |
|
EuroPacific Growth Fund (4) |
| 3,424,500 |
| 6.94 | % | |||||
Capital Research Global Investors |
| 2,739,040 |
| 5.55 | % |
| 2,885,754 |
| 5.79 % |
|
EuroPacific Growth Fund (5) |
| 2,637,766 |
| 5.29 % |
| |||||
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Directors and executive officers: |
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| |||||
Marcos Galperin |
| — |
| — |
|
| — |
| — |
|
Pedro Arnt |
| 19,129 |
| * |
|
| 19,129 |
| * |
|
Osvaldo Giménez |
| 18,385 |
| * |
|
| 18,385 |
| * |
|
Daniel Rabinovich |
| — |
| — |
|
| — |
| — |
|
Stelleo Tolda (6) |
| 91,003 |
| * |
|
| 91,003 |
| * |
|
Marcelo Melamud |
| — |
| — |
|
| — |
| — |
|
Emiliano Calemzuk |
| 2,669 |
| * |
| |||||
Emiliano Calemzuk (8) |
| 315 |
| * |
| |||||
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 |
| * |
| |||||
Meyer Malka (7) (8) |
| 57,071 |
| * |
| |||||
Susan Segal (8) |
| 315 |
| * |
| |||||
Mario Vázquez (8) |
| 2,669 |
| * |
| |||||
Roberto Balls Sallouti (8) |
| 315 |
| * |
| |||||
Alejandro Nicolás Aguzin (8) |
| 4,315 |
| * |
| |||||
Henrique Dubugras |
| — |
| — |
| |||||
All directors, director nominees and executive officers as a group (14 persons) |
| 193,517 |
| * |
|
*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.
22
MercadoLibre 2021 Proxy Statement | 35 |
(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.
* | Indicates less than 1% ownership |
(1) | Based on an aggregate amount of 49,852,319 shares of our common stock issued and outstanding as of April 12, 2021. |
(2) | According to a Schedule 13G/A filed on January 12, 2021 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 4,751,724 shares of our common stock. Baillie Gifford has sole voting power over 4,032,297 shares of our common stock and sole dispositive power over 4,751,724 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 16, 2021 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 2,885,754 shares of our common stock. Capital Research has sole voting power over 2,883,551 shares of our common stock and sole dispositive power over 2,885,754 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 and Capital International K.K. (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) | EuroPacific Growth Fund, 333 South Hope Street, Los Angeles, California 90071 (“EuroPacific”), is an investment company registered under Section 8 of the Investment Advisers Act of 1940, EuroPacific is the beneficial owner of 2,637,766 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. |
(6) | Includes 91,003 shares held by Tool, Ltd., of which Stelleo Tolda owns all of the outstanding equity. |
(7) | Includes 55,848 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. |
(8) | Includes 137 shares of stock, subject to forfeiture and transfer restrictions until the 2021 Annual Meeting of the shareholders of MercadoLibre, Inc. |
23
MercadoLibre 2021 Proxy Statement | 36 |
Compensation Discussion and Analysis
In this section, we describe and discuss our executive compensation program, including our philosophy to align our executive officers’ incentive compensation with stockholder value creation, the material elements of and total compensation paid to each of our named executive officers in 20182020 and the processes used by our compensation committee when making compensation decisions.
The named executive officers in this proxy statement are:
· | Marcos Galperin, President and Chief Executive Officer |
· | Pedro Arnt, Executive Vice President and Chief Financial Officer |
· | Stelleo Tolda, |
· | Osvaldo Giménez, |
· | Daniel Rabinovich, Executive Vice President and Chief |
The Executive Summary below provides an overview of our performance during 20182020 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, MercadoPagoMercado Libre, Mercado Pago and MercadoEnvíMercado Envíos, 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.
Executive Compensation Program Philosophy and Objectives
We operate in a rapidly evolving and highly competitive market that requires a highly qualified executive management team with strong operational skills. Our executive compensation philosophy is designed to align the compensation of our named executive officers with our business objectives and reward performance over both the short and long term. In evaluating the individual components of overall compensation for each of our named executive officers, the compensation committee reviews not only the individual elements of compensation, but also total compensation. By design, a significant portion of the compensation awarded under our executive compensation program is contingent upon companyCompany performance, in the case of our president and chief executive officer, and both individual and companyCompany performance, in the case of our other named executive officers. The committee remains committed to this philosophy of pay-for-performance and will continue to review executive compensation programs for the best methods to promote stockholder value through employee incentives.
We are committed to providing an executive compensation program that supports the following goals and philosophies:
· | 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 2021 Proxy Statement | 37 |
Consideration of 20172020 Stockholder Advisory Vote on Executive Compensation
At the 20182020 Annual Meeting of Stockholders, stockholders approved our 20172019 advisory vote on executive compensation with approximately 89.14%89.09% of the votes cast in favor. We believe that overwhelmingstrong support of our stockholders for the 20182020 say-on-pay vote proposal indicates that our stockholders are generally supportive of our approach to executive compensation. In the future, we will continue to consider the outcome of our say-on-pay votes and other stockholder feedback when making compensation decisions regarding our named executive officers.
24
Structure of Our 20182020 Executive Compensation Program
As discussed in more detail beginning on page 2639, our 20182020 executive compensation program is comprised of three different compensation elements:
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 (“LTRP”) | 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. |
Highlights of Our Executive Compensation Program in 20182020
In making its compensation decisions for the 20182020 performance year, the compensation committee recognized our company’s 2018Company’s 2020 results and the contributions and accomplishments of the named executive officers to our continuing growth story. The following is a summary of the highlights of our 20182020 executive compensation program:
· | 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. |
How Compensation Decisions are Made
Role of the Compensation Committee
Our compensation committee reviews and sets all compensation programs applicable to our executive officers and directors, our overall compensation strategy for all employees, and the specific compensation of our executive officers on an annual basis. In the course of this review, the compensation committee considers our current compensation programs and whether to modify them or introduce new programs or elements of compensation in order to better meet our overall compensation
MercadoLibre 2021 Proxy Statement | 38 |
objectives. The compensation committee has the authority to select, retain and terminate special counsel and other experts (including compensation consultants), as the committee deems appropriate. Our compensation committee has, from time to time, engaged compensation consultants to assist the compensation committee in reviewing and developing recommendations related to fixed and performance-based to compensation for our named executive officers as well as the market terms for our LTRP agreements.
25
Role of Executive Officers and Consultants
While the compensation committee determines our overall compensation philosophy and sets the compensation of our executive officers, it looks to our chief executive officer and the senior vice president of human resources and the compensation consultants retained by the committee, if any, to work within the compensation philosophy to make recommendations to the compensation committee with respect to both overall guidelines and specific compensation decisions. Each of our chief executive officer and our senior vice president of human resources provides the board and the compensation committee with their perspective on the performance of our executive officers as part of the annual personnel review and succession planning discussions and recommends to the compensation committee specific salary amounts for executive officers, other than the chief executive officer, and recommendations on other compensation programs, which the compensation committee considers before making final compensation determinations. Our senior vice president of human resources works closely with the chairman of our compensation committee and attends certain compensation committee meetings to provide perspectives on the competitive landscape and the needs of the business, information regarding our performance, and technical advice.
The compensation committee establishes compensation levels for our chief executive officer on its own or in consultation with the compensation consultants it retains, if any, and our chief executive officer is not present during any of these discussions.
Competitive ConsiderationsBase Salary
To set totalAnnual fixed cash compensation guidelines, the compensation committee reviews market data of companies against which the compensation committee believes our company competes for executive talent. The committee believes that it is necessary to consider this market data in making compensation decisions in order to attract and retain top-notch executive talent.
To facilitate making external compensation comparisons we initially established together with Mercer Consulting, our compensation peers in 2013. Mercer Consulting provided the compensation committee with competitive market data by analyzing proprietary third-party surveys and publicly-disclosed documents of companies in specified peer groups. In making 2018 peer group determinations, the compensation committee reviewed the peer groups selected in 2013 and some companies were changed based on the sizescope of revenuethe responsibilities and individual experience of our named executive officers, taking into account competitive market capitalization. Accordingly,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 (“LTRP”)
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.
Highlights of Our Executive Compensation Program in 2020
In making its compensation decisions for the 2020 performance year, the compensation committee recognized our Company’s 2020 results and the contributions and accomplishments of the named executive officers to our continuing growth story. The following is a summary of the highlights of our 2020 executive compensation program:
· | 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 Company’s demonstrated performance. As illustrated below, 98.5% of our chief executive officer’s total target direct compensation for our 2020 fiscal year was performance based and 93.8% of our other named executive officers’ average total target direct compensation was performance based. |
· | We continue to |
How Compensation Decisions are Made
Role of the Compensation Committee
Our compensation committee reviews and sets all compensation programs applicable to our executive officers and directors, our overall compensation strategy for all employees, and the specific compensation of our executive officers on an annual basis. In the course of this review, the compensation committee considers our current compensation programs and whether to modify them or introduce new programs or elements of compensation in order to better meet our overall compensation
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MercadoLibre 2021 Proxy Statement | 38 |
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26
Elements of Compensation Paid to Named Executive Officers in 2018, 2017 and 2016 | ||||||||||||||||||||||||||
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(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 |
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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 |
|
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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 |
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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” and “—Prior Long-Term Retention Plans” below.
objectives. The compensation committee has the authority to select, retain and terminate special counsel and other experts (including compensation consultants), as the committee deems appropriate. Our compensation committee has, from time to time, engaged compensation consultants to assist the compensation committee in reviewing and developing recommendations related to fixed and performance-based compensation for our named executive officers as well as the market terms for our LTRP agreements.
Role of Executive Officers and Consultants
While the compensation committee determines our overall compensation philosophy and sets the compensation of our executive officers, it looks to our chief executive officer and the senior vice president of human resources and the compensation consultants retained by the committee, if any, to work within the compensation philosophy to make recommendations to the compensation committee with respect to both overall guidelines and specific compensation decisions. Each of our chief executive officer and our senior vice president of human resources provides the board and the compensation committee with their perspective on the performance of our executive officers as part of the annual personnel review and succession planning discussions and recommends to the compensation committee specific salary amounts for executive officers, other than the chief executive officer, and recommendations on other compensation programs, which the compensation committee considers before making final compensation determinations. Our senior vice president of human resources works closely with the chairman of our compensation committee and attends certain compensation committee meetings to provide perspectives on the competitive landscape and the needs of the business, information regarding our performance, and technical advice.
The compensation committee establishes compensation levels for our chief executive officer on its own or in consultation with the compensation consultants it retains, if any, and our chief executive officer is not present during any of these discussions.
Base Salary
Base salaries for our named executive officers areAnnual fixed cash compensation established based on the scope of theirthe responsibilities and individual experience of our named executive officers, taking into account competitive market compensation paid by the above peer companies for similar positions. Base salaries are reviewed at least annually for merit increases and cost of living adjustments, and adjusted from time to time to realign salaries with market levels based on the peer review and after taking into account individual responsibilities, performance and experience.compensation.
In reviewing base salaries for 2018, the compensation committee considered the comparative market data previously prepared by Mercer. The committee believes that each named executive officer’s salary level is appropriate in light of his roles and responsibilities within our company.
27
Annual Bonus
In addition to base salaries, each of our named executive officers is eligible to receive annual cash bonuses. The compensation committee uses annualAnnual 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 (“LTRP”)
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.
Highlights of Our Executive Compensation Program in 2020
In making its compensation decisions for the 2020 performance year, the compensation committee recognized our Company’s 2020 results and the contributions and accomplishments of the named executive officers to our continuing growth story. The following is a summary of the highlights of our 2020 executive compensation program:
· | 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 Company’s demonstrated performance. As illustrated below, 98.5% of our chief executive officer’s total target direct compensation for our 2020 fiscal year was performance based and 93.8% of our other named executive officers’ average total target direct compensation was performance based. |
· | A portion of the compensation awarded under our 2020 executive compensation program is contingent upon both individual and Company performance, in the case of our named executive
|
· | The bonuses granted to our named executive officers under our 2020 LTRP are paid out over a period of six years and subject to forfeiture if a named executive officer retires, resigns or terminates his employment for any reason, or if a named executive officer takes certain |
· | We continue to provide no executive perquisites. |
How Compensation Decisions are Made
Role of the Compensation Committee
Our compensation committee reviews and sets all compensation programs applicable to our executive officers and directors, our overall compensation strategy for all employees, and the specific compensation of our executive officers on an annual basis. In the course of this review, the compensation committee considers our current compensation programs and whether to modify them or introduce new programs or elements of compensation in order to better meet our overall compensation
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Compensation Committee Report The 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’s Annual Report on Form 10-K for the year ended December 31, 2020, as incorporated by reference from this proxy statement.
Relationship of Compensation Practices to Risk Management When 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 23. The compensation committee has assessed our compensation policies and practices for our employees in 2020 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. Summary Compensation Table The following table sets forth compensation information for the years ended December 31,
(1)Base salaries in respect of fiscal year 2020 are paid in U.S dollar for Mr. Galperin, in Argentine pesos (2) Includes the fixed portion of 2020 and 2019 LTRP bonus paid out in respect of 2020. 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 2020. See “—Elements of Compensation Paid to Named Executive Officers in 2020, 2019 and 2018” for more information. (3) Annual bonuses in respect of fiscal year 2020 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
Grants of Plan-Based Awards for The table below summarizes plan-based awards granted to our named executive officers in
(1)Represents estimated future payouts (2) Represents the variable portion of each named executive officer’s 2020 LTRP bonus. The maximum amount of the
We have entered into employment agreements and indemnification agreements with each of our named executive officers. For a detailed description, see “Employment Agreements” below.
We have previously entered into employment agreements with each of our named executive officers. The term of each of these employment agreements is for an undetermined period. Each named executive officer that is party to an employment agreement is entitled to receive the base salary set forth in such named executive officer’s employment agreement, subject to the raises that we have provided to those named executive officers throughout the terms of their employment. In addition to base salary, the named executive officers may receive bonus compensation as we, in our sole discretion, elect to pay them in accordance with the bonus plan policy. The named executive officers are also entitled to reimbursement for reasonable out-of-pocket expenses that they incur on our behalf in the performance of their duties as named executive officers. The employment agreements provide that, during a named executive officer’s employment and for so long afterwards as any pertinent information remains confidential, such named executive officer will not use or disclose any confidential information that we use, develop or obtain. The agreements provide that all work product relating to our business belongs to us or our subsidiaries, and the named executive officer will promptly disclose such work product to us and provide reasonable assistance in connection with the defense of such work product.
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. Potential Payments Upon Termination or Change in Control We may terminate a named executive officer’s employment in the event that we determine, in our sole discretion, that there is “just cause” (as defined below). If we terminate a named executive officer’s employment for “just cause,” such named executive officer will not be entitled to receive any severance benefits, except for severance obligations mandated under the laws of the country where the named executive officer resides. If we terminate the named executive officer’s employment without “just cause,” such named executive officer shall be entitled to a lump sum severance payment in an amount equal to the greater of (x) one year’s gross base salary or (y) the severance obligations mandated under the laws of the country where the named executive officer resides. “Just cause” means and includes (1) the commission by the executive officer of any gross misconduct or any offense serious enough for the relationship to become impossible to continue, including without limitation, the executive officer’s willful and continuing disregard of the lawful written instructions of our board or such executive officer’s superiors, (2) any action or any omission by the executive officer, resulting in such executive officer’s breach of his duty of loyalty or any act of self-dealing, (3) any material breach by the executive officer of his duties and obligations under the employment agreement as decided by our board and (4) the executive officer’s conviction, in our board of director’s sole discretion, of any serious crime or offense for violating any law (including, without limitation, theft, fraud, paying directly or indirectly bribes or kick-backs to government officials, the crimes set forth in the U.S. Foreign Corrupt Practices Act of 1977 or the foreign equivalent thereof and the executive officer’s embezzlement of funds of our In September of 2001, we implemented the 2001 Management Incentive Bonus Plan (the “Incentive Plan”). As established in the Incentive Plan, our chief executive officer established which officers would be eligible for the Incentive Plan. Pursuant to the Incentive Plan, in the event we are sold, the eligible officers, as a group, are entitled to receive a “sale bonus” and a “stay bonus.” If the purchase price is equal to or greater than $20,000,000 then the eligible officers as a group are entitled to receive (1) a sale bonus equal to 5.5% of the purchase price and (2) a stay bonus equal to 7.1% of the purchase price, subject in both cases to a maximum combined cap of $78,335,000. If the purchase price is less than $20,000,000, then the eligible officers, as a group, are entitled to receive the “stay bonus” only. The bonuses are divided between the eligible officers, including our named executive officers and others, according to the participation percentages established by our chief executive officer, in accordance with the Incentive Plan. All payments under the Incentive Plan would be made in a lump sum payment.
For additional information regarding potential payments under our LTRPs in the event of a termination of employment, see “—Elements of Compensation—Long-Term Retention Plan— The following tables represent the payments due to each named executive officer in the event of (i) his termination without just cause or (ii) a change in control (as defined under the Except as otherwise set forth in an executive officer’s employment agreement, “Cause” means and includes (1) the executive officer’s material disregard of his responsibilities, authorities, powers, functions or duties or failure to act, (2) repeated or material negligence or misconduct by the executive officer in the performance of his duties, (3) appropriation (or attempted appropriation) of a business opportunity of the Company, including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company, (4) the commission by the executive officer of any act of fraud, theft or financial dishonesty with respect to the Company, or any felony or criminal act involving moral turpitude or dishonesty on the part of the executive officer, (5) the executive officer’s habitual drunkenness or excessive absenteeism not related to sickness, and/or (6) the material breach by the executive officer of any provision of his employment agreement that is not cured by the executive officer within thirty (30) days after written notice of breach has been delivered to the executive officer by the Company, unless such breach is incapable of cure (in which case the executive officer shall not be entitled to an opportunity to cure), in each case of clauses (1) through (6) above, as determined by the board in good faith. “Good Reason” means (1) a material diminution in the executive officer’s duties, functions and responsibilities to the Company without the executive officer’s consent or the Company preventing the executive officer from fulfilling or exercising the executive officer’s materials duties, functions and responsibilities to the Company without the executive officer’s consent; (2) a material reduction in the executive officer’s base salary or bonus opportunity or (3) a requirement that the executive officer relocate the executive officer’s employment more than fifty (50) miles from the location of the executive officer’s principal office without the consent of the executive officer. An executive officer’s resignation shall not be a resignation with Good Reason unless the executive officer gives the Company written notice (delivered within thirty (30) days after the executive officer knows of the event, action, etc. that the executive officer asserts constitutes Good Reason), the event, action, etc. that the executive officer asserts constitutes Good Reason is not cured, to the reasonable satisfaction of the executive officer, within thirty (30) days after such notice and the executive officer resigns effective not later than thirty (30) days after the expiration of such cure period. Payments Due Upon Termination Without Cause (1)
(1)Represents severance payable to the named executive officer as required under local
Payment Upon a Change in Control (1)
(1)Excludes any sale or stay bonuses payable under the Incentive Plan upon a sale of our (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 Payments Due Upon Termination without Cause or Resignation with Good Reason In Connection with a Change In Control (1)
(1)Excludes any sale or stay bonuses payable under the Incentive Plan upon a sale of our (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 Potential Payments Upon Death, Disability or Retirement Under the terms of the life insurance policies provided to our named executive officers, other than Mr. Galperin and Mr. Tolda, in the event of the executive’s death (by natural causes) or disability, the executive or his or her beneficiary, as applicable, would be entitled to receive $755,000 in proceeds from the third-party issuer of the Under the terms of the retirement benefit provided to our named executive officers, except for Mr. Galperin, in the event of their retirement, the named executive officer would be eligible to receive the amount accumulated with respect to the retirement benefit as of the date of retirement. Assuming the named executive officers who are eligible for the retirement benefit retired as of the last business day of
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| 2018 | 552,767 | 8,142,465 | - | 8,695,232 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pedro Arnt | 2020 | 324,904 | 211,169 | 3,655,108 | (4) | 47,925 | (5) | 4,239,106 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice | 2019 | 263,251 | 2,463,140 | 39,431 | 2,765,822 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and Chief Financial | 2018 | 216,709 | 1,861,055 | 26,170 | 2,103,934 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stelleo Tolda | 2020 | 249,835 | 378,840 | 4,189,830 | (4) | 9,149 | (6) | 4,827,654 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commerce | 2019 | 302,831 | 2,496,738 | 59,698 | 2,859,267 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President | 2018 | 243,915 | 1,882,362 | 109,122 | 2,235,399 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Osvaldo Giménez | 2020 | 337,485 | 215,326 | 3,751,223 | (4) | 52,013 | (7) | 4,356,047 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fintech | 2019 | 275,953 | 2,503,635 | 41,201 | 2,820,788 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President | 2018 | 227,165 | 1,736,764 | 27,347 | 1,991,276 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Daniel Rabinovich | 2020 | 328,227 | 344,002 | 5,196,145 | (4) | 59,375 | (8) | 5,927,749 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice | 2019 | 266,150 | 2,593,918 | 38,574 | 2,898,642 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and |
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(1) Base salaries in respect of fiscal year 2020 are paid in U.S dollar for Mr. Galperin, in Argentine pesos for Mr. Rabinovich and in Brazilian Reais for Mr. Tolda. For Mr. Arnt, base salary was paid in Argentine Pesos up to July 2020 and then in Uruguayan pesos. For Mr. Giménez, base salary was paid in Argentine Pesos up to August 2020 and then in Uruguayan Pesos. 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, 2020. 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 2020 and 2019 LTRP bonus paid out in respect of 2020. 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 2020. See “—Elements of Compensation Paid to Named Executive Officers in 2020, 2019 and 2018” for more information.
(3) Annual bonuses in respect of fiscal year 2020 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, 2020. Transition bonus and LTRP awards are paid in U.S. dollars.
(4) Includes the variable portion of prior LTRPs paid in January 2021 and the variable portion of the 2020 LTRP earned by each executive officer in respect of 2020, as well as annual bonus amounts earned in respect of 2020 and paid in 2021 of $103,368, $76,390 and $157,157, for each of Mr. Galperin, Mr. Tolda and Mr. Rabinovich, respectively.
(5) Amount consists of (i) our payment on behalf of Mr. Arnt of $10,212 in life insurance premiums and (ii) our contributions of $37,713 under the retirement benefit provided to Mr. Arnt.
(6) Amount consists of our contributions of $9,149 under the retirement benefit provided to Mr. Tolda.
(7) Amount consists of (i) our payment on behalf of Mr. Gimenez of $11,436 in life insurance premiums and (ii) our contributions of $40,577 under the retirement benefit provided to Mr. Gimenez.
(8) Amount consists of (i) our payment on behalf of Mr. Rabinovich of $8,376 in life insurance premiums and (ii) our contributions of $50,999 under the retirement benefit provided to Mr. Rabinovich.
Grants of Plan-Based Awards for 2020
The table below summarizes plan-based awards granted to our named executive officers in 2020.
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Name |
| Grant Date |
| Threshold ($) |
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| Target ($) |
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| Maximum ($) |
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Marcos Galperin |
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| 25,842 | (1) |
| 103,368 | (1) |
| 155,051 | (1) |
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| April 29, 2020 |
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| 3,069,793 | (2) |
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Pedro Arnt |
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| 26,785 | (1) |
| 107,138 | (1) |
| 160,707 | (1) |
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| April 29, 2020 |
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| 797,001 | (2) |
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Stelleo Tolda |
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| 19,097 | (1) |
| 76,390 | (1) |
| 114,585 | (1) |
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| April 29, 2020 |
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| 814,420 | (2) |
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Osvaldo Giménez |
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| 27,427 | (1) |
| 109,708 | (1) |
| 164,562 | (1) |
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| April 29, 2020 |
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| 799,269 | (2) |
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Daniel Rabinovich |
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| 26,193 | (1) |
| 104,771 | (1) |
| 157,157 | (1) |
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| April 29, 2020 |
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| 797,001 | (2) |
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(1) Represents estimated future payouts for the 2020 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 2020 by our named executive officers have been determined and were paid in or about the first quarter of 2021. 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 2020 LTRP bonus. The maximum amount of the variable portion of each named executive officer’s 2020 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’ 2020 LTRP bonus are included in the Summary Compensation Table under “Bonus”. See “—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Retention Plans – 2020 Long-Term Retention Plan” for information regarding the terms of the 2020 LTRP bonus.
We have entered into employment agreements and indemnification agreements with each of our named executive officers. For a detailed description, see “Employment Agreements” below.
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We have previously entered into employment agreements with each of our named executive officers. The term of each of these employment agreements is for an undetermined period.
Each named executive officer that is party to an employment agreement is entitled to receive the base salary set forth in such named executive officer’s employment agreement, subject to the raises that we have provided to those named executive officers throughout the terms of their employment. In addition to base salary, the named executive officers may receive bonus compensation as we, in our sole discretion, elect to pay them in accordance with the bonus plan policy. The named executive officers are also entitled to reimbursement for reasonable out-of-pocket expenses that they incur on our behalf in the performance of their duties as named executive officers.
The employment agreements provide that, during a named executive officer’s employment and for so long afterwards as any pertinent information remains confidential, such named executive officer will not use or disclose any confidential information that we use, develop or obtain. The agreements provide that all work product relating to our business belongs to us or our subsidiaries, and the named executive officer will promptly disclose such work product to us and provide reasonable assistance in connection with the defense of such work product.
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.
Potential Payments Upon Termination or Change in Control
We may terminate a named executive officer’s employment in the event that we determine, in our sole discretion, that there is “just cause” (as defined below). If we terminate a named executive officer’s employment for “just cause,” such named executive officer will not be entitled to receive any severance benefits, except for severance obligations mandated under the laws of the country where the named executive officer resides. If we terminate the named executive officer’s employment without “just cause,” such named executive officer shall be entitled to a lump sum severance payment in an amount equal to the greater of (x) one year’s gross base salary or (y) the severance obligations mandated under the laws of the country where the named executive officer resides.
“Just cause” means and includes (1) the commission by the executive officer of any gross misconduct or any offense serious enough for the relationship to become impossible to continue, including without limitation, the executive officer’s willful and continuing disregard of the lawful written instructions of our board or such executive officer’s superiors, (2) any action or any omission by the executive officer, resulting in such executive officer’s breach of his duty of loyalty or any act of self-dealing, (3) any material breach by the executive officer of his duties and obligations under the employment agreement as decided by our board and (4) the executive officer’s conviction, in our board of director’s sole discretion, of any serious crime or offense for violating any law (including, without limitation, theft, fraud, paying directly or indirectly bribes or kick-backs to government officials, the crimes set forth in the U.S. Foreign Corrupt Practices Act of 1977 or the foreign equivalent thereof and the executive officer’s embezzlement of funds of our Company or any of our affiliates).
In September of 2001, we implemented the 2001 Management Incentive Bonus Plan (the “Incentive Plan”). As established in the Incentive Plan, our chief executive officer established which officers would be eligible for the Incentive Plan. Pursuant to the Incentive Plan, in the event we are sold, the eligible officers, as a group, are entitled to receive a “sale bonus” and a “stay bonus.” If the purchase price is equal to or greater than $20,000,000 then the eligible officers as a group are entitled to receive (1) a sale bonus equal to 5.5% of the purchase price and (2) a stay bonus equal to 7.1% of the purchase price, subject in both cases to a maximum combined cap of $78,335,000. If the purchase price is less than $20,000,000, then the eligible officers, as a group, are entitled to receive the “stay bonus” only. The bonuses are divided between the eligible officers, including our named executive officers and others, according to the participation percentages established by our chief executive officer, in accordance with the Incentive Plan. All payments under the Incentive Plan would be made in a lump sum payment.
MercadoLibre 2021 Proxy Statement |
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For additional information regarding potential payments under our LTRPs in the event of a termination of employment, see “—Elements of Compensation—Long-Term Retention Plan—2020 Long-Term Retention Plan” and “—Prior Long-Term Retention Plans”
The following tables represent the payments due to each named executive officer in the event of (i) his termination without just cause or (ii) a change in control (as defined under the 2020 LTRP) or (iii) his termination without Cause or resignation for Good Reason (each as defined under the 2020 LTRP) within 120 days prior to or on or after a change in control, assuming such event occurred on December 31, 2020.
Except as otherwise set forth in an executive officer’s employment agreement, “Cause” means and includes (1) the executive officer’s material disregard of his responsibilities, authorities, powers, functions or duties or failure to act, (2) repeated or material negligence or misconduct by the executive officer in the performance of his duties, (3) appropriation (or attempted appropriation) of a business opportunity of the Company, including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company, (4) the commission by the executive officer of any act of fraud, theft or financial dishonesty with respect to the Company, or any felony or criminal act involving moral turpitude or dishonesty on the part of the executive officer, (5) the executive officer’s habitual drunkenness or excessive absenteeism not related to sickness, and/or (6) the material breach by the executive officer of any provision of his employment agreement that is not cured by the executive officer within thirty (30) days after written notice of breach has been delivered to the executive officer by the Company, unless such breach is incapable of cure (in which case the executive officer shall not be entitled to an opportunity to cure), in each case of clauses (1) through (6) above, as determined by the board in good faith.
“Good Reason” means (1) a material diminution in the executive officer’s duties, functions and responsibilities to the Company without the executive officer’s consent or the Company preventing the executive officer from fulfilling or exercising the executive officer’s materials duties, functions and responsibilities to the Company without the executive officer’s consent; (2) a material reduction in the executive officer’s base salary or bonus opportunity or (3) a requirement that the executive officer relocate the executive officer’s employment more than fifty (50) miles from the location of the executive officer’s principal office without the consent of the executive officer. An executive officer’s resignation shall not be a resignation with Good Reason unless the executive officer gives the Company written notice (delivered within thirty (30) days after the executive officer knows of the event, action, etc. that the executive officer asserts constitutes Good Reason), the event, action, etc. that the executive officer asserts constitutes Good Reason is not cured, to the reasonable satisfaction of the executive officer, within thirty (30) days after such notice and the executive officer resigns effective not later than thirty (30) days after the expiration of such cure period.
Payments Due Upon Termination Without Cause (1)
Name |
| Salary ($) |
| Local law severance ($) |
Marcos Galperin |
| 351,349 |
| 207,570 |
Pedro Arnt |
| 348,199 |
| 201,732 |
Stelleo Tolda |
| 248,267 |
| 173,882 |
Osvaldo Giménez |
| 356,552 |
| 205,190 |
Daniel Rabinovich |
| 340,507 |
| 612,851 |
(1) 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 termination without cause, the named executive officer would be entitled to a lump sum severance payment in an amount equal to the greater of (x) one year’s gross base salary or (y) the severance obligations mandated under the laws of the country where the named executive officer resides.
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MercadoLibre 2021 Proxy Statement | 48 |
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Proposal
Our board has unanimously approved the adoption of the Amended and Restated 2009 Plan and voted to recommend it for approval to our stockholders.
THE BOARD RECOMMENDS A VOTE “FOR” THE ADOPTION OF
THE AMENDED AND RESTATED 2009 EQUITY COMPENSATION PLAN.
42
Payment Upon a Change in Control (1)
PROPOSAL FOUR: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our audit committee has appointed Deloitte & Co. S.A. (“Deloitte”) to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2019, and stockholders are being asked to ratify the selection at the 2019 Annual Meeting. Representatives of Deloitte will not be present at the 2019 Annual Meeting in person. However, representatives will be present telephonically and will have the opportunity to make a statement and respond to appropriate questions.
Although ratification by stockholders is not a prerequisite to the ability of the audit committee to select Deloitte as our independent registered public accounting firm, we believe ratification to be desirable. Accordingly, our stockholders are being requested to ratify, confirm and approve the selection of Deloitte as our independent registered public accounting firm to conduct the annual audit of our consolidated financial statements for the year ending December 31, 2019. If the stockholders do not ratify the selection of Deloitte, the selection of the independent registered public accounting firm will be reconsidered by the audit committee; however, the audit committee may select Deloitte notwithstanding the failure of the stockholders to ratify its selection. If the appointment of Deloitte is ratified, the audit committee will continue to conduct an ongoing review of Deloitte’s scope of engagement, pricing and work quality, among other factors, and will retain the right to replace Deloitte at any time.
The audit committee considers Deloitte to be qualified to deliver independent auditing services to our company due to, among other things, their depth of experience, breadth of reserves, commitment to provide exceptional service, ability to handle transactional matters and location of key personnel.
Deloitte has served as our independent registered public accounting firm since 2010.
The following is a description of the fees billed to us by Deloitte for the years ended December 31, 2018 and 2017:
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| 2018 |
| 2017 | ||
Audit Fees |
| $ | 1,783,923 |
| $ | 1,577,210 |
Audit-Related Fees |
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| 166,509 |
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| 80,647 |
Tax Fees |
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| 141,428 |
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| 56,125 |
All Other Fees |
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| 31,033 |
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| 36,344 |
Total |
| $ | 2,122,893 |
| $ | 1,750,326 |
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Non-Equity Incentive | ||
Name |
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Marcos Galperin | 18,402,991 | |
Pedro Arnt | 3,951,172 | |
Stelleo Tolda | 4,352,191 | |
Osvaldo Giménez | 4,302,116 | |
Daniel Rabinovich | 4,717,027 |
(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 2020.
Payments Due Upon Termination without Cause or Resignation with Good Reason In Connection with a Change In Control (1)
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| Non-Equity Incentive |
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|
Name |
| Salary ($) (2) |
| Plan Compensation ($) (3) |
| Total ($) |
Marcos Galperin |
| 207,570 |
| 36,805,981 |
| 37,013,551 |
Pedro Arnt |
| 201,732 | - | 7,902,344 |
| 8,104,076 |
Stelleo Tolda |
| 173,882 | - | 8,704,381 |
| 8,878,263 |
Osvaldo Giménez |
| 205,190 | - | 8,604,231 |
| 8,809,421 |
Daniel Rabinovich |
| 612,851 | - | 9,434,053 |
| 10,046,904 |
(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 2020 and are payable in accordance with the ordinary payroll schedule or within 4 business days post termination.
Potential Payments Upon Death, Disability or Retirement
Under the terms of the life insurance policies provided to our named executive officers, other than Mr. Galperin and Mr. Tolda, in the event of the executive’s death (by natural causes) or disability, the executive or his or her beneficiary, as applicable, would be entitled to receive $755,000 in proceeds from the third-party issuer of the policy. If the named executive officer dies in an accident or suffers total and permanent disability, his or her beneficiary would be entitled to receive $1,505,000, payable by the third-party issuer of the policy, except for Mr. Galperin and Mr. Tolda.
Under the terms of the retirement benefit provided to our named executive officers, except for Mr. Galperin, in the event of their retirement, the named executive officer would be eligible to receive the amount accumulated with respect to the retirement benefit as of the date of retirement. Assuming the named executive officers who are eligible for the retirement benefit retired as of the last business day of 2020, the estimated amount of the benefits each named executive officer would receive under the terms of the retirement benefit are $64,968 for Mr. Arnt, $80,788 for Mr. Gimenez, $84,105 for Mr. Rabinovich and $67,734 for Mr. Tolda.
MercadoLibre 2021 Proxy Statement | 49
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44
Our headquarters are located at Arias 3751, 7th Floor, Buenos Aires, Argentina, C1430CRG and the telephone number at that location is 011-54-11-4640-8000.
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.
STOCKHOLDER PROPOSALS FOR 2020 ANNUAL MEETING
A stockholder may present proper proposals for inclusion in our proxy statement and for consideration at the 2020 Annual Meeting of Stockholders by submitting their proposals in writing to us in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our 2020 Annual Meeting of Stockholders, our Corporate Secretary must receive the written proposal at our principal executive offices no later than December 31, 2019; provided, however, that in the event that we hold our 2020 Annual Meeting of Stockholders more than 30 days before or after the one-year anniversary date of the 2019 Annual Meeting, we will disclose the new deadline by which stockholders proposals must be received under Item 5 of our earliest possible quarterly report on Form 10-Q or, if impracticable, by any means reasonably calculated to inform stockholders. In addition, stockholder proposals must otherwise comply with the requirements of Rule 14a-8 of the Exchange Act. Such proposals also must comply with SEC regulations under Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Proposals should be addressed to:
MercadoLibre, Inc.Attn: Corporate SecretaryArias 3751, 7th FloorBuenos Aires, Argentina, C1430CRG
Our bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders or nominate persons for election to our board at our annual meeting but do not intend for the proposal to be included in our proxy statement. Our bylaws provide that the only business that may be conducted at an annual meeting is business that is (1) specified in the notice of a meeting (or any supplement thereto) given by or at the direction of the chairman of the board or our board of directors, (2) otherwise properly brought before the meeting by the chairperson or by or at the direction of a majority of our board of directors, or (3) properly brought before the meeting by a stockholder entitled to vote at the annual meeting who has delivered timely written notice to our Corporate Secretary, which notice must contain the information specified in our bylaws.
To be timely, our Corporate Secretary must receive the written notice at our principal executive offices not earlier than 90 days and not later than 60 days before the anniversary of the date on which we first mailed our proxy materials for the prior year’s annual meeting of stockholders (i.e. between January 27, 2020 and February 26, 2020 for our 2020 Annual Meeting of Stockholders). However, in the event that the date of the 2020 Annual Meeting of Stockholders is advanced or delayed by more than 30 days from the first anniversary of the date of the 2019 Annual Meeting, in order to be timely, a proposal or nomination by the stockholder must be delivered not later than the later of (i) 90 days before the 2020 Annual Meeting of Stockholders or (ii) 10 days following the day on which public announcement of the date of such meeting is first made. The notice must satisfy the other requirements with respect to such proposals and nominations contained in our bylaws. If a stockholder fails to meet the deadlines in Rule 14a-8 and our bylaws or fails to comply with SEC Rule 14a-4, we may exercise discretionary voting authority under proxies we solicit to vote on any such proposal. Our bylaws were filed with the SEC as an exhibit to our registration statement on Form S-1 on May 11, 2007, which can be viewed by visiting our investor relations website at http://investor.mercadolibre.com and may also be obtained by writing to our Corporate Secretary at our principal executive office (Arias 3751, 7th floor, Buenos Aires, Argentina, C1430CRG).
By order of the board of directors,
Marcos Galperin
Chairman of the Board, President and Chief
Executive Officer
April 26, 2019
Buenos Aires, Argentina
2018
552,767
8,142,465
-
8,695,232
Pedro Arnt
2020
324,904
211,169
3,655,108
(4)
47,925
(5)
4,239,106
Executive Vice
2019
263,251
2,463,140
39,431
2,765,822
President and Chief Financial Officer
2018
216,709
1,861,055
26,170
2,103,934
Stelleo Tolda
2020
249,835
378,840
4,189,830
(4)
9,149
(6)
4,827,654
Commerce
2019
302,831
2,496,738
59,698
2,859,267
President
2018
243,915
1,882,362
109,122
2,235,399
Osvaldo Giménez
2020
337,485
215,326
3,751,223
(4)
52,013
(7)
4,356,047
Fintech
2019
275,953
2,503,635
41,201
2,820,788
President
2018
227,165
1,736,764
27,347
1,991,276
Daniel Rabinovich
2020
328,227
344,002
5,196,145
(4)
59,375
(8)
5,927,749
Executive Vice
2019
266,150
2,593,918
38,574
2,898,642
President and Chief Operating Officer
2018
216,709
1,703,261
23,732
1,943,702
MercadoLibre 2021 Proxy Statement | 45 |
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(1) Base salaries in respect of fiscal year 2020 are paid in U.S dollar for Mr. Galperin, in Argentine pesos for Mr. Rabinovich and in Brazilian Reais for Mr. Tolda. For Mr. Arnt, base salary was paid in Argentine Pesos up to July 2020 and then in Uruguayan pesos. For Mr. Giménez, base salary was paid in Argentine Pesos up to August 2020 and then in Uruguayan Pesos. 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, 2020. 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 2020 and 2019 LTRP bonus paid out in respect of 2020. 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 2020. See “—Elements of Compensation Paid to Named Executive Officers in 2020, 2019 and 2018” for more information.
(3) Annual bonuses in respect of fiscal year 2020 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, 2020. Transition bonus and LTRP awards are paid in U.S. dollars.
(4) Includes the variable portion of prior LTRPs paid in January 2021 and the variable portion of the 2020 LTRP earned by each executive officer in respect of 2020, as well as annual bonus amounts earned in respect of 2020 and paid in 2021 of $103,368, $76,390 and $157,157, for each of Mr. Galperin, Mr. Tolda and Mr. Rabinovich, respectively.
(5) Amount consists of (i) our payment on behalf of Mr. Arnt of $10,212 in life insurance premiums and (ii) our contributions of $37,713 under the retirement benefit provided to Mr. Arnt.
(6) Amount consists of our contributions of $9,149 under the retirement benefit provided to Mr. Tolda.
(7) Amount consists of (i) our payment on behalf of Mr. Gimenez of $11,436 in life insurance premiums and (ii) our contributions of $40,577 under the retirement benefit provided to Mr. Gimenez.
(8) Amount consists of (i) our payment on behalf of Mr. Rabinovich of $8,376 in life insurance premiums and (ii) our contributions of $50,999 under the retirement benefit provided to Mr. Rabinovich.
Grants of Plan-Based Awards for 2020
The table below summarizes plan-based awards granted to our named executive officers in 2020.
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Name |
| Grant Date |
| Threshold ($) |
|
| Target ($) |
|
| Maximum ($) |
|
Marcos Galperin |
|
|
| 25,842 | (1) |
| 103,368 | (1) |
| 155,051 | (1) |
|
| April 29, 2020 |
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|
| 3,069,793 | (2) |
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Pedro Arnt |
|
|
| 26,785 | (1) |
| 107,138 | (1) |
| 160,707 | (1) |
|
| April 29, 2020 |
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| 797,001 | (2) |
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Stelleo Tolda |
|
|
| 19,097 | (1) |
| 76,390 | (1) |
| 114,585 | (1) |
|
| April 29, 2020 |
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| 814,420 | (2) |
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Osvaldo Giménez |
|
|
| 27,427 | (1) |
| 109,708 | (1) |
| 164,562 | (1) |
|
| April 29, 2020 |
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| 799,269 | (2) |
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Daniel Rabinovich |
|
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| 26,193 | (1) |
| 104,771 | (1) |
| 157,157 | (1) |
|
| April 29, 2020 |
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| 797,001 | (2) |
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(1) Represents estimated future payouts for the 2020 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 2020 by our named executive officers have been determined and were paid in or about the first quarter of 2021. 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 2020 LTRP bonus. The maximum amount of the variable portion of each named executive officer’s 2020 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’ 2020 LTRP bonus are included in the Summary Compensation Table under “Bonus”. See “—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Retention Plans – 2020 Long-Term Retention Plan” for information regarding the terms of the 2020 LTRP bonus.
We have entered into employment agreements and indemnification agreements with each of our named executive officers. For a detailed description, see “Employment Agreements” below.
MercadoLibre 2021 Proxy Statement | 46 |
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We have previously entered into employment agreements with each of our named executive officers. The term of each of these employment agreements is for an undetermined period.
Each named executive officer that is party to an employment agreement is entitled to receive the base salary set forth in such named executive officer’s employment agreement, subject to the raises that we have provided to those named executive officers throughout the terms of their employment. In addition to base salary, the named executive officers may receive bonus compensation as we, in our sole discretion, elect to pay them in accordance with the bonus plan policy. The named executive officers are also entitled to reimbursement for reasonable out-of-pocket expenses that they incur on our behalf in the performance of their duties as named executive officers.
The employment agreements provide that, during a named executive officer’s employment and for so long afterwards as any pertinent information remains confidential, such named executive officer will not use or disclose any confidential information that we use, develop or obtain. The agreements provide that all work product relating to our business belongs to us or our subsidiaries, and the named executive officer will promptly disclose such work product to us and provide reasonable assistance in connection with the defense of such work product.
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.
Potential Payments Upon Termination or Change in Control
We may terminate a named executive officer’s employment in the event that we determine, in our sole discretion, that there is “just cause” (as defined below). If we terminate a named executive officer’s employment for “just cause,” such named executive officer will not be entitled to receive any severance benefits, except for severance obligations mandated under the laws of the country where the named executive officer resides. If we terminate the named executive officer’s employment without “just cause,” such named executive officer shall be entitled to a lump sum severance payment in an amount equal to the greater of (x) one year’s gross base salary or (y) the severance obligations mandated under the laws of the country where the named executive officer resides.
“Just cause” means and includes (1) the commission by the executive officer of any gross misconduct or any offense serious enough for the relationship to become impossible to continue, including without limitation, the executive officer’s willful and continuing disregard of the lawful written instructions of our board or such executive officer’s superiors, (2) any action or any omission by the executive officer, resulting in such executive officer’s breach of his duty of loyalty or any act of self-dealing, (3) any material breach by the executive officer of his duties and obligations under the employment agreement as decided by our board and (4) the executive officer’s conviction, in our board of director’s sole discretion, of any serious crime or offense for violating any law (including, without limitation, theft, fraud, paying directly or indirectly bribes or kick-backs to government officials, the crimes set forth in the U.S. Foreign Corrupt Practices Act of 1977 or the foreign equivalent thereof and the executive officer’s embezzlement of funds of our Company or any of our affiliates).
In September of 2001, we implemented the 2001 Management Incentive Bonus Plan (the “Incentive Plan”). As established in the Incentive Plan, our chief executive officer established which officers would be eligible for the Incentive Plan. Pursuant to the Incentive Plan, in the event we are sold, the eligible officers, as a group, are entitled to receive a “sale bonus” and a “stay bonus.” If the purchase price is equal to or greater than $20,000,000 then the eligible officers as a group are entitled to receive (1) a sale bonus equal to 5.5% of the purchase price and (2) a stay bonus equal to 7.1% of the purchase price, subject in both cases to a maximum combined cap of $78,335,000. If the purchase price is less than $20,000,000, then the eligible officers, as a group, are entitled to receive the “stay bonus” only. The bonuses are divided between the eligible officers, including our named executive officers and others, according to the participation percentages established by our chief executive officer, in accordance with the Incentive Plan. All payments under the Incentive Plan would be made in a lump sum payment.
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For additional information regarding potential payments under our LTRPs in the event of a termination of employment, see “—Elements of Compensation—Long-Term Retention Plan—2020 Long-Term Retention Plan” and “—Prior Long-Term Retention Plans” The following tables represent the payments due to each named executive officer in the event of (i) his termination without just cause or (ii) a change in control (as defined under the 2020 LTRP) or (iii) his termination without Cause or resignation for Good Reason (each as defined under the 2020 LTRP) within 120 days prior to or on or after a change in control, assuming such event occurred on December 31, 2020. Except as otherwise set forth in an executive officer’s employment agreement, “Cause” means and includes (1) the executive officer’s material disregard of his responsibilities, authorities, powers, functions or duties or failure to act, (2) repeated or material negligence or misconduct by the executive officer in the performance of his duties, (3) appropriation (or attempted appropriation) of a business opportunity of the Company, including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company, (4) the commission by the executive officer of any act of fraud, theft or financial dishonesty with respect to the Company, or any felony or criminal act involving moral turpitude or dishonesty on the part of the executive officer, (5) the executive officer’s habitual drunkenness or excessive absenteeism not related to sickness, and/or (6) the material breach by the executive officer of any provision of his employment agreement that is not cured by the executive officer within thirty (30) days after written notice of breach has been delivered to the executive officer by the Company, unless such breach is incapable of cure (in which case the executive officer shall not be entitled to an opportunity to cure), in each case of clauses (1) through (6) above, as determined by the board in good faith. “Good Reason” means (1) a material diminution in the executive officer’s duties, functions and responsibilities to the Company without the executive officer’s consent or the Company preventing the executive officer from fulfilling or exercising the executive officer’s materials duties, functions and responsibilities to the Company without the executive officer’s consent; (2) a material reduction in the executive officer’s base salary or bonus opportunity or (3) a requirement that the executive officer relocate the executive officer’s employment more than fifty (50) miles from the location of the executive officer’s principal office without the consent of the executive officer. An executive officer’s resignation shall not be a resignation with Good Reason unless the executive officer gives the Company written notice (delivered within thirty (30) days after the executive officer knows of the event, action, etc. that the executive officer asserts constitutes Good Reason), the event, action, etc. that the executive officer asserts constitutes Good Reason is not cured, to the reasonable satisfaction of the executive officer, within thirty (30) days after such notice and the executive officer resigns effective not later than thirty (30) days after the expiration of such cure period. Payments Due Upon Termination Without Cause (1)
(1) 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 termination without cause, the named executive officer would be entitled to a lump sum severance payment in an amount equal to the greater of (x) one year’s gross base salary or (y) the severance obligations mandated under the laws of the country where the named executive officer resides.
Payment Upon a Change in Control (1)
(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 2020. Payments Due Upon Termination without Cause or Resignation with Good Reason In Connection with a Change In Control (1)
(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 2020 and are payable in accordance with the ordinary payroll schedule or within 4 business days post termination. Potential Payments Upon Death, Disability or Retirement Under the terms of the life insurance policies provided to our named executive officers, other than Mr. Galperin and Mr. Tolda, in the event of the executive’s death (by natural causes) or disability, the executive or his or her beneficiary, as applicable, would be entitled to receive $755,000 in proceeds from the third-party issuer of the policy. If the named executive officer dies in an accident or suffers total and permanent disability, his or her beneficiary would be entitled to receive $1,505,000, payable by the third-party issuer of the policy, except for Mr. Galperin and Mr. Tolda. Under the terms of the retirement benefit provided to our named executive officers, except for Mr. Galperin, in the event of their retirement, the named executive officer would be eligible to receive the amount accumulated with respect to the retirement benefit as of the date of retirement. Assuming the named executive officers who are eligible for the retirement benefit retired as of the last business day of 2020, the estimated amount of the benefits each named executive officer would receive under the terms of the retirement benefit are $64,968 for Mr. Arnt, $80,788 for Mr. Gimenez, $84,105 for Mr. Rabinovich and $67,734 for Mr. Tolda.
Pay Ratio Disclosure As required by Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the median of the annual total compensation of all our employees, other than Mr. Galperin, to the annual total compensation of Mr. Galperin, our chief executive officer. We identified the median employee by examining the 2020 annual total compensation, consisting of base salary, annual bonus and LTRPs, if applicable, for all individuals, excluding Mr. Galperin, who were employed by us on December 31, 2020. In order to calculate the compensation for our median employee, we converted local currency to U.S. dollars using the average exchange rate for the month of December, 2020.
Based on this information, for 2020, the ratio of the annual total compensation of our chief executive officer, to the annual total compensation of our median employee was estimated to be 977 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC regulations and guidance based on our payroll and employment records. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Supplemental Ratio We have calculated a supplemental ratio with the following differences from the aforementioned CEO pay ratio (which was calculated in accordance with the SEC’s rules): The amount of LTRP to be paid is subject to the price of our common stock on the NASDAQ, which can result in significant variability in payout year over year. For purposes of the supplemental ratio, we have calculated the annual total compensation of our chief executive officer for 2020 using the target value of his 2020 LTRP award, which mitigates the effect of fluctuations in the price of our common stock. In addition, for purposes of the supplemental ratio, in identifying our median employee for the purpose of calculating that employee’s annual total compensation, we excluded all of our customer service representatives, whose responsibilities could be outsourced. After making the above adjustments, the ratio of the annual total compensation of our chief executive officer to the annual total compensation of our median employee is estimated to be 208 to 1. In addition, below is a chart comparing the most recent monthly minimum wage for a full-time employee in the main Latin American countries in which we operate, as reported by Mercer Human Resources, to an estimate of the current monthly minimum wage for a full-time employee in California based on the information provided by the U.S. Department of Labor.
The monthly minimum wage of a full-time employee in the main Latin American countries in which we operate, which is substantially lower than the estimate of the monthly minimum wage for a full-time employee located in California, may be useful to consider when comparing our CEO pay ratio with that of public companies whose workforce is predominantly located in the United States.
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