MercadoLibre Inc.

04/23/2024 | Press release | Distributed by Public on 04/23/2024 14:11

Management Change/Compensation - Form 8-K

Item 5.02 Departure of Directors or Certain Officers; Election of Directors: Appointment of Certain Officers: Compensatory Arrangements of Certain Officers.

Establishment of Performance Goals under the 2024 Bonus Program

On April 18, 2024, the Board of Directors (the "Board") of MercadoLibre, Inc. (the "Company") established the performance goals for the Company's bonus program for the 2024 fiscal year (the "2024 Bonus Program"). Under the 2024 Bonus Program, the bonus payout for each of Marcos Galperin (President & Chief Executive Officer), Osvaldo Giménez (Fintech President), Daniel Rabinovich (EVP and Chief Operating Officer), Martin de los Santos (EVP and Chief Financial Officer) and Juan Martín de la Serna (EVP - Corporate Affairs) (referred to below as "NEOs") is based on achievement of Net Revenue (in constant dollars), Income from operations (in constant dollars), Total payment volume - adjusted (the total sum of all transactions paid for using Mercado Pago, including only On Platform, Online Payments Aggregator, Wallet, Point, Credit Card and Prepaid transactions) (in constant dollars) and the Company's Competitive Net Promoter Score. The Board has determined a target bonus for each NEO and applies an adjustment of up to + 50% or -50% to each bonus based upon the individual performance of each NEO.

The Board set each NEO's target bonus under the 2024 Bonus Program as four months of base salary (33.33% of each NEO's annual base salary).

Adoption of the 2024 Long Term Retention Program

On April 18, 2024, the Board approved the adoption of the 2024 Long Term Retention Program (the "2024 LTRP") and, after taking into account a compensation competitiveness analysis carried out by the Company's independent third-party compensation consultant, established the target award for each NEO under the 2024 LTRP. The 2024 LTRP provides the NEOs, along with other members of senior management, with the opportunity to receive cash payments annually for a period of six years (with the first payment occurring between January 1, 2025 and April 30, 2025, as determined by the Company), subject to continued employment on each payment date (other than in specified circumstances). Under the 2024 LTRP, each NEO shall receive:

•16.66% of half of his or her target 2024 LTRP award annually for a period of six years (with the first payment occurring between January 1, 2025 and April 30, 2025) (the "Annual Fixed Payment"); and

•on each date the Company pays the Annual Fixed Payment, each NEO will also receive a payment equal to the product of (i) 16.66% of half of the NEO's target 2024 LTRP award and (ii) the quotient of (a) the Applicable Year Stock Price (as defined below) over (b) the average closing price of the Company's common stock on NASDAQ during the final 60 trading days of 2023. For purposes of the 2024 LTRP, the "Applicable Year Stock Price" is the average closing price of the Company's common stock on 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 NASDAQ.

The target 2024 LTRP awards for our NEOs are set forth below.

Name Title Target 2024 LTRP Award (nominal)
Marcos Galperin President & Chief Executive Officer $10,000,000
Osvaldo Giménez Fintech President $3,500,000
Daniel Rabinovich Executive Vice President & Chief Operating Officer $3,500,000
Martin de los Santos Executive Vice President & Chief Financial Officer $2,000,000
Juan Martín de la Serna Executive Vice President - Corporate Affairs $2,700,000

The foregoing description of the 2024 LTRP does not purport to be complete and is qualified in its entirety by reference to the full text of the 2024 LTRP, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.