TABLE OF CONTENTS
Structure of Our 2020 Executive Compensation Program
STRUCTURE OF OUR 2022 EXECUTIVE COMPENSATION PROGRAM
As discussed in more detail
beginning on page 39,below, our 20202022 executive compensation program is comprised of three different compensation elements: | 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”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 2022
Highlights of Our Executive Compensation Program in 2020
In making its compensation decisions for the
20202022 performance year, the compensation committee recognized our Company’s
20202022 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
20202022 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%94.9% of our chief executive officer’s total target direct compensation for our 20202022 fiscal year was performance based and 93.8%80.9% of our other named executive officers’ average total target direct compensation was performance based. |
■ | ·
| | A portion of the compensation awarded under our 20202022 executive compensation program is contingent upon both individual and Company performance, in the case ofwith respect to our named executive officers. In 2020,2022, subject to satisfaction of the Minimum Eligibility Conditions (described under “2020“2022 Annual Bonus Performance Elements” below), the total amount of our chief executive officer’s annual bonus was based on pre-determined Company performance criteria. For each of our other named executive officers, subject to satisfaction of the Minimum Eligibility Conditions, the cash award was partially based on pre-determined Company performance criteria and partially based on qualitative assessment of individual performance. |
■ | ·
| | The bonuses granted to our named executive officers under our 20202022 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 specified actions that could adversely affect our business. In addition, 50% of the cash payable under the 20202022 LTRP will move in tandem with increases or decreases in our stock price during the six year period over which the bonus is paid. |
■ | ·
| | We continue to provide no executive perquisites. |
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TABLE OF CONTENTS
How Compensation Decisions are Made
Role of the Compensation Committee
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
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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
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
perspectiveperspectives 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 Considerations
COMPETITIVE CONSIDERATIONS
To set total 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.
With the aim of gaining accuracy in our process of compensation benchmarking,
in 2020, we revisited and introduced some minor changes to our previous compensation peer group
(defined in 2018) based on public information available about both size of revenues and market capitalization of each selected company, resulting in
the followinga list of companies that we considered when analyzing and making decisions relating to our 2020 compensation
process:process. We continued to look to the same companies with respect to our 2022 compensation process. The companies include: Facset, Twitter, IBM, eBay, NortonLifeLock,
Square,Block, Fiserv, Activision Blizzard, Service Now, Citrix Systems, Intuit, Vmware, Verizon, NetApp, Workday, Electronic Arts and Booking Holdings.
We also participate and analyze different surveys of market compensation practices in our industry and broadly across all industries. To determine
20202022 executive officer compensation, our compensation committee takes into consideration information about compensation peers and market survey to craft competitive compensation packages appropriate for our particular executives.
Elements
The following table summarizes the various elements of compensation paid to our named executive officers, in each of 2020, 20192022, 2021 and 2018.2020. Due to the SEC’s reporting requirements, the information set forth in the table below may not correspond with the amounts included in the table under the caption “Summary Compensation Table” below. However, we believe the following summary to be a more accurate reflection of the compensation actually paid in each of these years to our named executive officers.
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TABLE OF CONTENTS
Executive Compensation | |
MercadoLibre 2021 Proxy Statement | 39 | |
ELEMENTS OF COMPENSATION PAID TO NAMED EXECUTIVE OFFICERS IN 2022, 2021 AND 2020
| Marcos Galperin
President
and CEO | | | 2022 | | | 448,824 | | | 218,958 | | | — | | | — | | | 3,177,806 | | | — | | | 1,919,710 | | | 1,333,174 | | | 829,312 | | | 838,316 | | | 8,766,100 | |
| 2021 | | | 400,146 | | | 343,232 | | | — | | | 6,707,822 | | | 4,696,339 | | | — | | | 2,716,874 | | | 1,798,279 | | | 1,009,162 | | | — | | | 17,671,854 | |
| 2020 | | | 350,973 | | | 264,355 | | | 6,067,354 | | | 6,883,905 | | | 4,815,408 | | | — | | | 2,779,380 | | | 1,834,748 | | | — | | | — | | | 22,996,123 | |
| Pedro Arnt Executive VP and CFO | | | 2022 | | | 439,764 | | | 141,857 | | | — | | | — | | | 598,537 | | | — | | | 498,408 | | | 346,128 | | | 215,312 | | | 232,123 | | | 2,472,129 | |
| 2021 | | | 369,264 | | | 190,033 | | | — | | | 1,263,413 | | | 884,552 | | | — | | | 705,374 | | | — | | | 262,006 | | | — | | | 3,674,642 | |
| 2020 | | | 324,904 | | | 78,335 | | | 1,142,782 | | | 1,296,578 | | | 906,979 | | | — | | | 721,602 | | | — | | | — | | | — | | | 4,471,180 | |
| Osvaldo Giménez Fintech President | | | 2022 | | | 450,314 | | | 145,260 | | | — | | | — | | | 668,010 | | | — | | | 499,826 | | | 347,113 | | | 324,183 | | | 327,703 | | | 2,762,409 | |
| 2021 | | | 378,123 | | | 253,682 | | | — | | | 1,263,413 | | | 987,223 | | | — | | | 707,381 | | | 468,210 | | | 394,487 | | | — | | | 4,452,519 | |
| 2020 | | | 337,485 | | | 82,115 | | | 1,142,782 | | | 1,296,578 | | | 1,012,253 | | | — | | | 723,655 | | | — | | | — | | | — | | | 4,594,868 | |
| Daniel Rabinovich Executive VP and COO | | | 2022 | | | 537,875 | | | 224,789 | | | — | | | — | | | 801,613 | | | — | | | 498,408 | | | 346,128 | | | 270,152 | | | 300,394 | | | 2,979,359 | |
| 2021 | | | 433,989 | | | 274,635 | | | — | | | 1,692,071 | | | 1,184,668 | | | — | | | 705,374 | | | 466,882 | | | 328,739 | | | — | | | 5,086,358 | |
| 2020 | | | 328,227 | | | 235,492 | | | 1,530,511 | | | 1,736,489 | | | 1,214,703 | | | — | | | 721,602 | | | 476,350 | | | — | | | — | | | 6,243,374 | |
| Juan Martín
de la Serna Executive VP Corporate Affairs | | | 2022 | | | 499,899 | | | 208,917 | | | — | | | — | | | 160,323 | | | 214,062 | | | 209,953 | | | 325,716 | | | 202,614 | | | 232,123 | | | 2,053,607 | |
Elements of Compensation Paid to Named Executive Officers
in 2020, 2019 and 2018
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in U.S. | | Year | | Base | | Annual | | Long Term Retention Plans (Cash)(4) | | Total |
dollars | | | | Salary ($)(1) | | Bonus ($)(1)(2)(3) | | 2011 ($) | | 2012 ($) | | 2013 ($) | | 2014 ($) | | 2015 ($) | | 2016 ($) | | 2017 ($) | | 2019 ($) | | 2020 ($) (2) | | ($)(*) |
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Marcos Galperin | | 2020 | | 350,973 | | 264,355 | | - | | - | | - | | - | | 6,067,354 | | 6,883,905 | | 4,815,408 | | 2,779,380 | | 1,834,748 | | 22,996,123 |
President and | | 2019 | | 507,186 | | 103,886 | | - | | 989,436 | | - | | 2,810,295 | | 2,650,085 | | 2,965,835 | | 2,165,974 | | 1,388,541 | | - | | 13,581,238 |
CEO | | 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 |
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Pedro Arnt | | 2020 | | 324,904 | | 78,335 | | - | | - | | - | | - | | 1,142,782 | | 1,296,578 | | 906,979 | | 721,602 | | - | | 4,471,180 |
Executive VP | | 2019 | | 263,251 | | 61,165 | | - | | 478,759 | | - | | 529,317 | | 499,142 | | 558,613 | | 407,960 | | 360,503 | | - | | 3,158,710 |
and CFO | | 2018 | | 216,709 | | - | | 350,182 | | 303,902 | | 472,098 | | 347,708 | | 330,102 | | 364,800 | | 276,902 | | - | | - | | 2,662,403 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Stelleo Tolda | | 2020 | | 249,835 | | 183,757 | | - | | - | | - | | - | | 1,142,782 | | 1,296,578 | | 1,012,253 | | 737,373 | | 486,761 | | 5,109,339 |
Commerce | | 2019 | | 302,831 | | 50,365 | | - | | 478,759 | | - | | 529,317 | | 499,142 | | 558,613 | | 455,312 | | 368,382 | | - | | 3,242,721 |
President | | 2018 | | 243,915 | | - | | 350,182 | | 303,902 | | 472,098 | | 347,708 | | 330,102 | | 364,800 | | 309,042 | | - | | - | | 2,721,749 |
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Osvaldo Giménez | | 2020 | | 337,485 | | 82,115 | | - | | - | | - | | - | | 1,142,782 | | 1,296,578 | | 1,012,253 | | 723,655 | | - | | 4,594,868 |
Fintech | | 2019 | | 275,953 | | 64,116 | | - | | 478,759 | | - | | 529,317 | | 499,142 | | 558,613 | | 455,312 | | 361,528 | | - | | 3,222,740 |
President | | 2018 | | 227,165 | | - | | 175,091 | | 303,902 | | 472,098 | | 347,708 | | 330,102 | | 364,800 | | 309,042 | | - | | - | | 2,529,908 |
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Daniel Rabinovich | | 2020 | | 328,227 | | 235,492 | | - | | - | | - | | - | | 1,530,511 | | 1,736,489 | | 1,214,703 | | 721,602 | | 476,350 | | 6,243,374 |
Executive VP | | 2019 | | 266,150 | | 42,630 | | - | | 190,230 | | - | | 529,317 | | 668,493 | | 748,142 | | 546,374 | | 360,503 | | - | | 3,351,839 |
and COO | | 2018 | | 216,709 | | - | | 55,657 | | 120,753 | | 472,098 | | 347,708 | | 442,101 | | 488,572 | | 370,851 | | - | | - | | 2,514,449 |
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(*)
| The table above may not total due to rounding. |
(1) 1.
| Base salaries in respect of fiscal year 20202022 are paid in U.S dollardollars for Mr. Galperin, in Argentine pesos for Mr.Messrs. Rabinovich and in Brazilian Reais for Mr. Tolda. For Mr. Arnt, base salary was paid in Argentine Pesos up to July 2020de la Serna and then in Uruguayan pesos. For Mr.pesos for Messrs. Giménez base salary was paid in Argentine Pesos up to August 2020 and then in Uruguayan Pesos.Arnt. 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, 2020.2022. Mr. GalperinGalperin’s base salary is calculated considering a fixed amount in Uruguayan Pesos and then converted into U.S. dollars at the exchange rate of the monthly payroll calculation date. Annual Bonuses in respect of fiscal year 20202022 are paid in U.S. dollardollars for Mr. Galperin, in Argentine pesos for Mr.Messrs Rabinovich Brazilian Reais for Mr. Toldaand de la Serna and in Uruguayan Pesos for Mr. Arnt and Giménez. Except for Mr. Galperin whose annual bonus is calculated considering a fixed amount in Uruguayan Pesos and then converted into U.S. dollars at the exchange rate of the payroll calculation date and then paid in U.S. dollar, annual bonuses are disclosed above in U.S. dollars in each case, at the average exchange rate for the month of December, 2020. 2022. |
(2) 2.
| 2020 Annual Bonus and portions of 2020 LTRP waswere cancelled for Mr. Arnt and Mr. Giménez due to the incident with an unaffiliated entity mentioned and described in our Annual Report on Form 10-K filed on March 1, 2021. A penalty was applied to Mr. Arnt canceling the 2020 Annual Bonus and the 1st and 2nd tranches of 2020 LTRP and to Mr. Giménez canceling the 2020 Annual Bonus and 1st tranche of 2020 LTRP. |
(3) 3.
| For 2021 and 2020, Annual Bonus column includes the transition bonus approved by the Board on March 29, 2019, which was intended to fill a one-time gap in the total pay package that arose from the rebalancing that shifted a significant portion of the executive officers’ total pay package from the Company’s annual incentive plan to its long-term retention plans. Transition bonus were paid in U.S. dollars. |
(4) 4.
| For a description of our LTRPs, as defined below, see “—Elements of Compensation—Long-Term Retention Plans” and “—Prior Long-Term Retention Plans” below. LTRP awards are paid in U.S. dollars. |
BASE SALARY
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Base Salary
Base salaries for our named executive officers are established based on the scope of their responsibilities and individual experience, 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.
In reviewing base salaries for
2020,2022, the compensation committee considered the comparative market data previously mentioned. The committee believes that each named executive officer’s salary level is appropriate in light of his roles and responsibilities within our Company.
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TABLE OF CONTENTSAnnual Bonus
ANNUAL BONUS
In addition to base salaries, each of our named executive officers is eligible to receive annual cash bonuses. The compensation committee uses annual cash bonuses to compensate named executive officers for achieving short-term financial and operational goals and, in the case of our named executive officers other than our president and chief executive officer, for achieving individual annual performance objectives during the preceding fiscal year. These objectives are generally established in the first half of the year and vary depending on the individual named executive officer, but relate generally to financial and operational targets as well as a cultural alignment assessment carried out by the chief executive officer for the rest of the named executive officers. If established objective thresholds for the annual corporate performance period are not met, the executive does not receive a bonus under our annual cash bonus program for the year. After the end of each fiscal year, our actual corporate performance is compared to the pre-determined objectives established by our board of directors during the prior year and an individual performance multiplier is applied to determine the annual cash bonus award payout.
For
2020,2022, the compensation committee selected the following as the corporate performance (the
“Consolidated“Consolidated Corporate Performance”Performance”) measures:■ | ·
| | Net revenues - adjusted, defined as our net revenues for 20202022 net of the transportation costs charged by third-party carriers, including those charges presented in gross basis, after adjustments for unusual items as determined by the compensation committee, in each case, excluding Venezuela net revenues. This metric is measured in constant dollars; |
■ | ·
| | Income from operations, defined as our income from operations in 2020 after adjustments for unusual items as determined by the compensation committee.2022. This metric is measured in constant dollars; |
■ | ·
| | Total payment transactionsvolume - adjusted, defined as the number of transactions paid for using Mercado Pago, including onlyOn Platform, Online Payments Aggregator, Wallet, Point, Credit Card and Prepaid transactions; transactions. This metric is measured in constant dollars; and |
■ | ·
| | Percentage of shipments delivered in less than two days, defined as the share of shipments delivered in less than 48 hours over total shipments of Mercado Libre;
|
| ·
| | Competitive NPS, which stands for Net Promoter Score and is defined as a metric of our Commerce and Fintech customers’ satisfaction, calculated as the percentage of promoters (customers who would likely recommend Mercado Libre ) minus the percentage of detractors (customers who would not likely recommend Mercado Libre). This metric is measured by renowned independent market research consultants (Ipsos, IbopeMegaresearch and Netquest), through anonymous surveys that compare Mercado Libre with its main competitors in each country. |
The Consolidated Corporate Performance measure is calculated as a weighted average of the financial metrics described above (as set forth below in “Weighting of
20202022 Annual Bonus Performance Measures”), which are converted from the local currency into U.S. dollars at the previous year’s applicable exchange rate, in order to mitigate the impact of fluctuations in local currencies on the Company’s operational performance.
The following changes were made between the
20192021 and
20202022 measures:
■ | ·
| | Replace Net IncomeIncrease weight for Income (loss) from operations with the purpose of aligning Performance Matrix targets with the most relevant financial metric used internallyfrom 25% to assess business performance; 35% (then reducing Net Revenues-adjusted weight from 50% to 40%). |
■ | ·
| | Replace prior Marketplace NPS metric for a weighted compound NPS that includes both Commerce and Fintech targets;
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| | Add Total payment transactions – adjusted andRemove Percentage of shipments deliveredweighted Shipping lead time in less than two2 days metrics, in ordermetric and increase weight of Competitive NPS metric from 10% to align Performance Measures with two of our main business goals. 15%. |
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TABLE OF CONTENTSWeighting of 2020 Annual Bonus Performance Measures
WEIGHTING OF 2022 ANNUAL BONUS PERFORMANCE MEASURES
The following table describes the components of each named executive officer’s
20202022 annual bonus and the percentage weight of each element:
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Consolidated Performance— | | Marcos | | Pedro | | Stelleo | | Osvaldo | | Daniel | |
Constant Dollars (1) | | Galperin | | Arnt | | Tolda | | Giménez | | Rabinovich | |
Net Revenues | | 50.0 | | 50.0 | | 50.0 | | 50.0 | | 50.0 | % |
Income from operations | | 20.0 | | 20.0 | | 20.0 | | 20.0 | | 20.0 | |
Total Payment Transactions | | 10.0 | | 10.0 | | 10.0 | | 10.0 | | 10.0 | |
Percentage of Shipments delivered in less than two days | | 10.0 | | 10.0 | | 10.0 | | 10.0 | | 10.0 | |
Competitive NPS | | 10.0 | | 10.0 | | 10.0 | | 10.0 | | 10.0 | |
Overall Performance (2) | | 100.0 | | 100.0 | | 100.0 | | 100.0 | | 100.0 | % |
Individual Performance Multiplier (3) | | | | | | | | | | | |
Above Expectations | | 1.5 | | 1.5 | | 1.5 | | 1.5 | | 1.5 | |
Meet Expectations | | 1.0 | | 1.0 | | 1.0 | | 1.0 | | 1.0 | |
Below Expectations | | 0.5 | | 0.5 | | 0.5 | | 0.5 | | 0.5 | |
| Net Revenues - adjusted | | | 40.0% | | | 40.0% | | | 40.0% | | | 40.0% | | | 40.0% | |
| Income from operations | | | 35.0% | | | 35.0% | | | 35.0% | | | 35.0% | | | 35.0% | |
| Total Payment Volume | | | 10.0% | | | 10.0% | | | 10.0% | | | 10.0% | | | 10.0% | |
| Competitive NPS | | | 15.0% | | | 15.0% | | | 15.0% | | | 15.0% | | | 15.0% | |
| Overall Performance(2) | | | 100.0% | | | 100.0% | | | 100.0% | | | 100.0% | | | 100.0% | |
| Individual Performance Multiplier(3) | | | | | | | | | | | | | | | | |
| Above Expectations | | | 1.5 | | | 1.5 | | | 1.5 | | | 1.5 | | | 1.5 | |
| Meet Expectations | | | 1.0 | | | 1.0 | | | 1.0 | | | 1.0 | | | 1.0 | |
| Below Expectations | | | 0.5 | | | 0.5 | | | 0.5 | | | 0.5 | | | 0.5 | |
1.
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(1)
| Constant Dollars: financial metrics translated to U.S. dollars at the previous year’s applicable exchange rate, which is intended to isolate the operational performance from fluctuations in local currencies. |
(2) 2.
| Overall Performance for our named executive officers is equal to the Weighted Average for the Consolidated Performance—Constant Dollars. |
(3) 3.
| Individual Performance Multiplier is set as a multiplier for the annual bonus for each executive officer based on the qualitative assessment of individual performance for the 20202022 fiscal year. |
2022 ANNUAL BONUS PERFORMANCE ELEMENTS
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2020 Annual Bonus Performance Elements
The following table sets forth the target levels for the various performance metrics (the “Minimum Eligibility Conditions”) included in the Company performance goals for 20202022 and actual performance realized against those targets:
Metrics | | 2020 Actual | | | 2020 Target | | Minimum Achievement as | | % of Objective |
| | (in MM) | | | (in MM) | | percentage of | | (2) |
| | | | | | | Target (1) | | | |
Consolidated Performance—Constant Dollars | | | | | | | | | | | | |
Net Revenues - adjusted | | 5,066.3 | | | 4,118.9 | | | 76.8 | % | | 120.0 | % |
Income from operations | | 227.4 | | | 46.9 | | | 75.0 | % | | 120.0 | % |
Total Payment Transactions - adjusted | | 1,878.8 | | | 1,487.7 | | | 78.1 | % | | 120.0 | % |
Percentage of Shipments delivered in less than two days | | 71.9 | % | | 63.6 | % | | 90.0 | % | | 112.9 | % |
Competitive NPS | | 57.0 | % | | 63.8 | % | | 95.0 | % | | 89.2 | % |
Weighted Average - Overall Performance | | | | | | | | 79.7 | % | | 110.0 | % |
Individual Performance Multiplier | | | | | | | | | | | | |
Messrs. Galperin and Tolda | | | | | | | | | | | 1.0 | |
Mr. Rabinovich | | | | | | | | | | | 1.5 | |
| Consolidated Performance—Constant Dollars | | | | | | | | | | | | | |
| Net Revenues - adjusted | | | 11,154.1 | | | 11,331.8 | | | 80.3% | | | 98.4% | |
| Income from operations | | | 1,119 | | | 747.9 | | | 75.0% | | | 120.0% | |
| Total Payment Volume - adjusted | | | 140,379.5 | | | 124,206.8 | | | 80.4% | | | 113.0% | |
| Competitive NPS | | | 61.7% | | | 65.6% | | | 95.0% | | | 94.1% | |
| Weighted Average - Overall Performance | | | | | | | | | 80.7% | | | 106.8% | |
| Individual Performance Multiplier | | | | | | | | | | | | | |
| Messrs. Arnt and Giménez | | | | | | | | | | | | 1.0 | |
| Messrs. Galperin, Rabinovich and de la Serna | | | | | | | | | | | | 1.5 | |
(1) 1.
| The minimum weighted average as percentage of target to meet the Minimum Eligibility Conditions was established at 79.7%80.7%. The minimum achievement for Net Revenues – adjusted and Total Payment TransactionsVolumes - adjusted is set as the midpoint between 20192021 achievements and 20202022 targets, for Income from operations is set considering a maximum deviation of 1.5% of Net Revenues - adjusted that equals 75% accomplishment and for Shipments delivered in less than two days and NPS it is set at 90% and 95%, respectively. . |
(2) 2.
| Percentage of target cannot be higher than 120% to limit the subsidy of over-performing to underperforming metrics. Weighted Average - Overall Performance cannot be higher than 110% and for payment purposes is capped at 100%. |
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TABLE OF CONTENTS
Long-Term Retention Plans
2020 Long-Term Retention Plan
LONG-TERM RETENTION PLANS
2022 LONG-TERM RETENTION PLAN
The compensation committee makes annual grants of long-term incentive awards to focus its executives on the Company’s long-term goals, in particular its share growth. The LTRP is designed to assist us in the retention of key employees that have valuable industry experience and developed competencies. Subject to continued employment through each payment date, the LTRP is paid as follows:
■ | ·
| | a cash payment equal to 16.66% of half of his or her 20202022 LTRP bonus once a year for a period of six years, (the “Annual Fixed Payment”); and
|
■ | ·
| | on each date our Company pays the Annual Fixed Payment to the named executive officer, he or she will also receive a cash payment equal to the product of (i) 16.66 % of half of the applicable 20202022 LTRP bonus and (ii) the quotient of (a) the Applicable Year Stock Price (as defined below) over (b) $553.45,$1,391.81, the average closing price of our common stock on the NASDAQ during the final 60 trading days of 2019.2021. For purposes of the 20202022 LTRP, the “Applicable Year Stock Price” is the average closing price of our common stock on the NASDAQ during the final 60 trading days of the fiscal year preceding the fiscal year in which the applicable payment date occurs, for so long as our common stock is listed on the NASDAQ. |
| |
MercadoLibre 2021 Proxy Statement
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20202022 LTRP Bonus
BONUS
The following table sets forth the nominal target value of the
20202022 LTRP bonus and the portion of the
20202022 LTRP bonus paid out for
20202022 for each named executive officer:
| | | Nominal Target Value of 2020 LTRP Bonus | | | Portion of 2020 LTRP Bonus Paid Out in respect of 2020 |
Marcos Galperin | | $ | 6,139,585 | | $ | 1,834,748 |
Pedro Arnt | | $ | 1,594,002 | | $ | - |
Stelleo Tolda | | $ | 1,628,840 | | $ | 486,761 |
Osvaldo Giménez | | $ | 1,598,537 | | $ | - |
Daniel Rabinovich | | $ | 1,594,002 | | $ | 476,350 |
| Marcos Galperin | | | $6,139,585 | | | $838,316 | |
| Pedro Arnt | | | $1,700,000 | | | $232,123 | |
| Juan Martín de la Serna | | | $1,700,000 | | | $232,123 | |
| Osvaldo Giménez | | | $2,400,000 | | | $327,703 | |
| Daniel Rabinovich | | | $2,200,000 | | | $300,394 | |
(1)
| Target value is determined based on a range at each organizational level. For NEOs, the range is initially determined by the CEO (other than for the CEO’s bonus, which is determined by the Compensation Committee) and subsequently approved by the Compensation Committee. The Compensation Committee has discretion to deviate from the range. |
Other Compensation and Benefits Prior Long-Term Retention
Plans. Plans.Our prior LTRPs provide our named executive officers, along with other members of senior management, the opportunity to receive certain cash payments subject to achievement of the Minimum Eligibility Conditions. If the Minimum Eligibility Conditions are achieved, each named executive officer is generally eligible to receive a fixed payment, payable in equal annual installments over a 6-86 year period and a variable payment on the same payment schedule, whose amount fluctuates based on the ratio of our average stock price for a period of trading days over the average stock price for a period of trading days in the year the LTRP award was granted to the named executive officer, in each case, subject to continued employment.Equity
awards.awards.In 2019, our board amended and our stockholders approved the Amended and Restated 2009 Equity Compensation Plan. As of December 31, 2020,2022, we had approximately 1,000,000990,497 shares of common stock available for issuance under the Amended and Restated 2009 Equity Compensation Plan. As has been Company policy in recent years, management compensation is tied to capital markets performance through our LTRPs, and not through the issuance of stock. Consequently,no awards were granted to employeesnamed executive officers under the Equity Plan in 2020.2022. See “Director Compensation” for information about equity awards granted to our non-employee directors in 2022.
Other compensation and benefits.benefits.We maintain broad-based benefits that are provided to certain full-time employees, including our named executive officers, including health insurance, extra vacation days, mobile telephones, executive education sponsorship programs, parking spaces and subsidized English, Spanish and/or Portuguese lessons. We also provide life insurance policies for our employees, including our named executive officers, and lend cars through our Eco Friendly Company car policy (MercadoLibre leases vehicles under this program forto provide to certain employees).
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TABLE OF CONTENTS
Employment
agreements.agreements.We have entered into employment agreements with each named executive officer as described below under “Employment Agreements.” Certain named executive officers may also receive benefits in the event of a change in control of our Company as described under “Potential Payments Upon Termination or Change in Control.”Life insurance and retirement
benefits.benefits.We provide executive life insurance policies for Messrs. Arnt, Giménez, de la Serna and Rabinovich, providing for coverage of up to $755,000, with twice the level of coverageand in the event of the named executive officer’s accidental death or disability.disability an additional amount of $750,000 will be covered. We also provide a retirement benefit for Mr. Rabinovich and Mr. de la Serna, which consisted of monthly Company contributions equal to 11.5% of the named executive officer’s base salary plus annual bonus and are credited with interest at a rate equal to 1.5% and for Mr. Stelleo, which consisted of monthly Company contributions equal to 4% of the named executive officer’s base salary and were credited with interest at an average annual rate of 2.72% during 2020.
equal to 2.03%. | |
MercadoLibre 2021 Proxy Statement
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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,
2020,2022, as incorporated by reference from this proxy statement.
| | | | COMPENSATION COMMITTEE Meyer Malka (Chairman)
| |
| | | | Emiliano Calemzuk (Chairman)
Mario Vazquez
Susan Segal | |
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.arrangements. The compensation committee has assessed our compensation policies and practices for our employees in 20202022 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.
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TABLE OF CONTENTS
Summary Compensation Table
The following table sets forth compensation information for the years ended December 31,
2020, 20192022, 2021 and
2018 for our named executive officers.2020. | Marcos Galperin
President and Chief Executive Officer | | | 2022 | | | 448,824 | | | 2,046,528 | | | 5,775,215(4) | | | — | | | 8,270,567 | |
| 2021 | | | 400,146 | | | 1,695,883 | | | 14,584,758 | | | — | | | 16,680,787 | |
| 2020 | | | 350,973 | | | 1,184,251 | | | 19,974,299 | | | — | | | 21,509,523 | |
| Pedro Arnt
Executive Vice President and Chief Financial Officer | | | 2022 | | | 439,764 | | | 540,167 | | | 1,398,865(4) | | | 10,212(5) | | | 2,389,008 | |
| 2021 | | | 369,264 | | | 344,002 | | | 2,774,709 | | | 10,212 | | | 3,498,187 | |
| 2020 | | | 324,904 | | | 211,169 | | | 3,655,108 | | | 47,925 | | | 4,239,106 | |
| Osvaldo Giménez
Fintech President | | | 2022 | | | 450,314 | | | 666,423 | | | 1,541,505(4) | | | 11,436(6) | | | 2,669,678 | |
| 2021 | | | 378,123 | | | 548,538 | | | 3,328,358 | | | 11,436 | | | 4,266,455 | |
| 2020 | | | 337,485 | | | 215,326 | | | 3,751,223 | | | 52,013 | | | 4,356,047 | |
| Daniel Rabinovich
Executive Vice President and Chief Operating Officer | | | 2022 | | | 537,875 | | | 615,667 | | | 1,700,817(4) | | | 100,969(7) | | | 2,955,328 | |
| 2021 | | | 433,989 | | | 510,669 | | | 3,891,700 | | | 84,435 | | | 4,920,793 | |
| 2020 | | | 328,227 | | | 344,002 | | | 5,196,145 | | | 59,375 | | | 5,927,749 | |
| Juan Martín de la Serna
Executive VP –
Corporate Affairs | | | 2022 | | | 499,899 | | | 447,622 | | | 1,031,086(4) | | | 92,544(8) | | | 2,071,151 | |
| | | | | | | | | | | | | | | | | |
1.
| Base salaries in respect of fiscal year 2022 are paid in U.S dollars for Mr. Galperin, in Argentine pesos for Messrs. Rabinovich and de la Serna and in Uruguayan pesos for Messrs. Giménez and Arnt. Base salaries that are paid in Argentina pesos 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, 2022. 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 2022, 2021, 2020 and 2019 LTRP bonus paid out in respect of 2022. 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. For 2021 and 2020 it also includes the transition bonus approved by the Board on March 29, 2019. See “—Elements of Compensation Paid to Named Executive Officers in 2022, 2021 and 2020” for more information. Transition bonus and LTRP awards were paid in U.S. dollars. |
3.
| Annual Bonuses in respect of fiscal year 2022 are paid in U.S. dollars for Mr. Galperin, in Argentine pesos for Messrs. Rabinovich and de la Serna and in Uruguayan Pesos for Mr. Arnt and Giménez. Except for Mr. Galperin whose annual bonus is calculated considering a fixed amount in Uruguayan Pesos and then converted into U.S. dollars at the exchange rate of the payroll calculation date and then paid in U.S. dollar, annual bonuses are disclosed above in U.S. dollars in each case, at the average exchange rate for the month of December, 2022. |
4.
| Includes the variable portion of prior LTRPs paid in January 2023 and the variable portion of the 2022 LTRP earned by each executive officer in respect of 2022, as well as annual bonus amounts earned in respect of 2022 and paid in 2023 of $218,958, $141,857, $145,260, $224,789 and $208,917, for each of Mr. Galperin, Mr. Arnt, Mr. Giménez, Mr. Rabinovich and Mr. de la Serna, respectively. LTRP awards are paid in U.S. dollars. |
5.
| Amount consists of our payment on behalf of Mr. Arnt of $10,212 in life insurance premiums. |
6.
| Amount consists of our payment on behalf of Mr. Giménez of $11,436 in life insurance premiums. |
7
| Amount consists of (i) our payment on behalf of Mr. Rabinovich of $8,376 in life insurance premiums and (ii) our contributions of $92,593 under the retirement benefit provided to Mr. Rabinovich. |
8.
| Amount consists of (i) our payment on behalf of Mr. de la Serna of $14,292 in life insurance premiums and (ii) our contributions of $78,252 under the retirement benefit provided to Mr. de la Serna. |
Name and | | Year | | Salary | | Bonus | | Non-Equity | | | All Other | | | Total ($) |
Principal | | | | ($) (1) | | ($) (2) (3) | | Incentive Plan | | | Compensation ($) | | | |
Position | | | | | | | | Compensation | | | | | | |
| | | | | | | | ($) (3) | | | | | | |
Marcos Galperin | | 2020 | | 350,973 | | 1,184,251 | | 19,974,299 | (4) | | - | | | 21,509,523 |
President and Chief | | 2019 | | 507,186 | | | | 10,970,014 | | | - | | | 11,477,200 |
Executive Officer | | 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 |
| | | | | | | | | | | | | | |
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TABLE OF CONTENTS
Executive Compensation | |
MercadoLibre 2021 Proxy Statement | 45 | |
(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 $50,999 under the retirement benefit provided to Mr. Rabinovich.
Grants of Plan-Based Awards for
20202022
The table below summarizes plan-based awards granted to our named executive officers in
2020.2022. | | | | Estimated Possible Payouts Under |
| | | | Non-Equity Incentive Plan Awards |
Name | | Grant Date | | Threshold ($) | | | Target ($) | | | Maximum ($) | |
Marcos Galperin | | | | 25,842 | (1) | | 103,368 | (1) | | 155,051 | (1) |
| | April 29, 2020 | | | | | 3,069,793 | (2) | | | |
| | | | | | | | | | | |
Pedro Arnt | | | | 26,785 | (1) | | 107,138 | (1) | | 160,707 | (1) |
| | April 29, 2020 | | | | | 797,001 | (2) | | | |
| | | | | | | | | | | |
Stelleo Tolda | | | | 19,097 | (1) | | 76,390 | (1) | | 114,585 | (1) |
| | April 29, 2020 | | | | | 814,420 | (2) | | | |
| | | | | | | | | | | |
Osvaldo Giménez | | | | 27,427 | (1) | | 109,708 | (1) | | 164,562 | (1) |
| | April 29, 2020 | | | | | 799,269 | (2) | | | |
| | | | | | | | | | | |
Daniel Rabinovich | | | | 26,193 | (1) | | 104,771 | (1) | | 157,157 | (1) |
| | April 29, 2020 | | | | | 797,001 | (2) | | | |
(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.
| Marcos Galperin | | | | | | 36,493(1) | | | 145,972(1) | | | 218,958(1) | |
| May 4, 2022 | | | | | | 3,069,793(2) | | | | |
| Pedro Arnt | | | | | | 35,464(1) | | | 141,857(1) | | | 212,786(1) | |
| May 4, 2022 | | | | | | 850,000(2) | | | | |
| Osvaldo Giménez | | | | | | 36,315(1) | | | 145,260(1) | | | 217,890(1) | |
| May 4, 2022 | | | | | | 1,200,000(2) | | | | |
| Daniel Rabinovich | | | | | | 37,465(1) | | | 149,859(1) | | | 224,789(1) | |
| May 4, 2022 | | | | | | 1,100,000(2) | | | | |
| Juan Martín de la Serna | | | | | | 34,820(1) | | | 139,278(1) | | | 208,917(1) | |
| May 4, 2022 | | | | | | 850,000(2) | | | | |
1.
| Represents estimated future payouts for the 2022 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 2022 by our named executive officers have been determined and were paid in or about the first quarter of 2023. 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 2022 LTRP bonus. The maximum amount of the variable portion of each named executive officer’s 2022 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’ 2022 LTRP bonus are included in the Summary Compensation Table under “Bonus”. See “—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Retention Plans – 2022 Long-Term Retention Plan” for information regarding the terms of the 2022 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-backskick- 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—20202022 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 20202022 LTRP) or (iii) his termination without Cause or resignation for Good Reason (each as defined under the 20202022 LTRP) within 120 days prior to or on or after a change in control, assuming such event occurred on December 31, 2020.2022.