8-KLeadership ChangesExhibits & Filings

MERCADOLIBRE INC 8-K Report, Executive Changes (Oct 3, 2013)

Filed October 3, 2013For Securities:MELI

Summary

MercadoLibre, Inc. (MELI) filed an 8-K on October 2, 2013, reporting on the finalization of its executive compensation program for 2013. The company's Board of Directors, upon recommendation from the compensation committee, established performance criteria for annual cash bonuses and adopted the 2013 Long-Term Retention Plan (2013 LTRP). This filing provides details on the base salary, annual bonus range, and target LTRP bonus for each named executive officer, along with the specific financial and operational metrics that will determine bonus payouts. The report also outlines the compensation structure for outside directors, including annual fees for board and committee services. The 2013 LTRP introduces a component tied to the company's stock performance, with payments varying based on the average closing stock price over specific periods, relative to a 2012 baseline. This indicates a strategic alignment of executive compensation with shareholder value creation.

Key Highlights

  • 1Finalization of the 2013 executive compensation program, including annual cash bonus performance criteria and the adoption of the 2013 Long-Term Retention Plan (LTRP).
  • 2Details on 2013 base salaries, annual cash bonus ranges, and target LTRP bonuses for key named executive officers (NEOs), including CEO Marcos Galperin.
  • 3Performance metrics for annual bonuses include U.S. GAAP and Constant Dollar measures for Overall Company Performance, and specific MercadoPago metrics for relevant executives, alongside individual performance assessments.
  • 4Minimum eligibility conditions for both annual bonuses and LTRP awards require achieving 50% of weighted average planned growth in applicable financial metrics and a 'meets expectations' individual performance rating.
  • 5The 2013 LTRP has a six-year payout structure, with a fixed annual cash payment and a variable component linked to the company's stock price performance relative to a 2012 baseline ($79.57 average closing price).
  • 6Introduction of a new Outside Director Compensation Program effective June 2013, featuring a fixed cash payment for board service and an adjustable component tied to stock price.
  • 7Additional annual cash compensation for committee chairs and the lead independent director is also detailed within the new director compensation program.

Frequently Asked Questions

The 2013 executive compensation program consists of base salary, annual cash bonuses tied to company and individual performance metrics, and a Long-Term Retention Plan (LTRP) that includes a stock performance component.

Annual cash bonuses are determined based on the achievement of pre-set financial and operational goals for the company (measured in U.S. GAAP and Constant Dollars) and, for most executives, specific MercadoPago performance metrics. A qualitative assessment of individual performance also contributes to the final bonus payout. Executives must meet minimum eligibility conditions to receive any bonus.

The 2013 LTRP is designed to retain key executives and align their compensation with long-term shareholder value. It involves six annual cash payments, each consisting of a fixed portion and a variable portion that is influenced by MercadoLibre's stock price performance compared to a 2012 baseline. Eligibility requires meeting the same minimum conditions as for annual bonuses.

A new director compensation program was adopted, effective June 2013, for the period through June 2016. It includes a fixed annual cash payment for board service ($50,000) and an adjustable component based on stock price. Additional annual fees are provided for committee chairs and the lead independent director.