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 2019 Bonus Program
On August 6, 2019, the Board of Directors (the “Board”)
of MercadoLibre, Inc. (the “Company”) established the performance goals for the Company’s bonus program for the
2019 fiscal year (the “2019 Bonus Program”). Under the 2019 Bonus Program, the bonus payout for each person who was
a “named executive officer” in the Company’s proxy statement for its most recent Annual Meeting (referred to
below as “NEOs”) is based on achievement of net income, net revenue and competitive net promoter score as well as a
target salary bonus set forth for each NEO by the Board. The Board then 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 2019 Bonus
Program as 30.77% of each NEO’s annual base salary.
Adoption of Compensation Plan for Independent Directors
On August 6, 2019, the Board, upon the recommendation of the Compensation
Committee of the Board, approved compensation for independent directors, as defined by the Board, for service during the one year
periods commencing at the Company’s annual shareholders’ meeting in 2019, 2020 and 2021. Under the terms of the Board
approval, for each year of service the independent directors will receive (i) a cash retainer fee of $72,000 and (ii) shares of
restricted stock (“Shares”) having a value equal to $120,000, based on the market value of the company’s stock
(as described below). The Shares shall be subject to forfeiture and transfer restrictions until the date of the annual shareholders’
meeting taking place in the year after which the independent director received such Shares. Additionally, the Board approved additional
annual cash retainer fees to be paid to each individual serving the Board in one of 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 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 market value of the Shares shall be based on (i) for Shares
delivered in 2019, the average price paid by the Company to repurchase Shares on August 8, 2019, (ii) for Shares delivered in 2020
and 2021, the average price paid by the Company to repurchase Shares on June 10, 2020 and 2021, respectively, and (iii) for Shares
delivered to an independent director whose service commenced after the Company’s annual shareholders’ meeting, the
average price paid by the Company on the date that the Company repurchases Shares in connection with the anticipated delivery of
Shares to such new independent director. Shares will be granted pursuant to the Company’s Amended and Restated 2009 Equity
Incentive Plan.
The Board additionally approved reimbursement for travel and out-of-pocket
expenses incurred by outside directors in connection with attending meetings of the Board and committees of the Board.
Director Resignation
On August 5, 2019, Javier Olivan announced his resignation, effective
August 7, 2019, from his position as a member of the board of directors (the “Board”) of MercadoLibre, Inc. (“MercadoLibre).
Mr. Olivan said in a statement, “It’s been an incredible six years, and I’m proud of what Marcos and the rest
of the management team have achieved. MercadoLibre has become the leading tech company in Latin America and has done an amazing
job fostering entrepreneurship by expanding e-commerce and mobile payments across the region. I will continue rooting for the company
and the leadership team as I focus my time on other projects.”
Chief Executive Officer of the Company, Marcos Galperin, said in
a statement, “Javi has been an amazing value-added Board Member for the last six years. We will greatly miss his knowledge
of our industry, candid generosity and, above all, his wonderful personality. We thank him for his years of service, and hope for
him to stay close to the company.”
MercadoLibre and the Board are grateful to Mr. Olivan for his service.