MercadoLibre (MELI) DEF 14ADefinitive proxy

Items of business:

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. The Notice of Internet Availability mailed to our stockholders contains instructions on how to access our proxy materials, including our proxy statement and our 2023 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 2024 Annual Meeting

Dear Stockholder:

Compounding is a concept that is familiar to investors, and the returns generated for shareholders by MercadoLibre are a good example of this concept at work. Compounding is also a good way to look at the investments we have been making in technology and product development over many years. These investments drive innovation and, over time, a significant number of these innovations compound into a fantastic and constantly improving user experience. This is reflected in the growth of the number of people that choose the MercadoLibre Marketplace as their platform to buy or sell goods, and Mercado Pago as the platform to manage their finances. In 2023, unique active buyers¹ reached 85 million, growing at their fastest rate (15% year over year) since 2020, whilst Fintech monthly active users² showed even more impressive growth of 32% year over year at the end of 2023. These are foundations that will support our future growth.

We operate in a region that has significant growth opportunities; Latin America has a combined population of more than 650 million and a GDP of more than $6 trillion. This leaves considerable room for growth as we continue to scale our user base. We believe that we are uniquely positioned to capitalize on these growth opportunities as the region's leading e-commerce platform and one of its leading fintechs. Core to achieving this is building competitive advantages through investment in technology and this continues to be one of our guiding principles.

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 2024 Annual Meeting of Stockholders or receiving your proxy vote.

Any statements herein regarding MercadoLibre, Inc. that are not historical or current facts are forward-looking statements. These forward-looking statements convey MercadoLibre, Inc.’s current expectations or forecasts of future events. Forward-looking statements regarding MercadoLibre, Inc. include, but are not limited to, statements regarding MercadoLibre, Inc.’s expectations, objectives and progress against strategic priorities, initiatives and strategies related to our products and services, business and market outlook, opportunities, strategies and trends, impacts of foreign exchange, the potential impact of the uncertain macroeconomic and geopolitical environment on our financial results, customer demand and market expansion, our planned product and services releases and capabilities, industry growth rates, future stock repurchases, our expected tax rate and tax strategies, the impact and result of pending legal, administrative and tax proceedings, and other factors that may cause MercadoLibre, Inc.’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors,” and “Special Note Regarding Forward-Looking Statements” sections of MercadoLibre, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023, and any of MercadoLibre, Inc.’s other applicable filings with the Securities and Exchange Commission. Unless required by law, MercadoLibre, Inc. undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof.

Our distribution centers have a smart solution that measures the volume of each item to define the ideal package size and ensure safety without wasting material. 100% of the packaging of the products leaving our distribution centers is recyclable, reusable or compostable. We ensure the circularity of materials by encouraging the use of recycled content in our packaging.

At the same time, since 2020, we have promoted the shipping of certain products in their primary packaging, without further packaging. In this way, we contribute to the reduction of packaging materials, optimize space and, in turn, reduce the fuel used for transport. In 2023, this form of shipment continued to grow, reaching 15% of products.

To learn more about MercadoLibre’s impact and sustainability efforts see our Impact Report, which is available on our website: https://investor.mercadolibre.com/sustainability/.

We have also published our Sustainability Bond report, which is available on our investor relations website: https://investor.mercadolibre.com/sustainability/.

Links to websites or reports 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.

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 nine 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:

The terms of our three Class II directors are set to expire at the 2024 Annual Meeting. The nominating and corporate governance committee recommended, and our board nominated, each of Nicolás Galperin, Henrique Dubugras and Richard Sanders as nominees for re-election as Class II directors of our Company at the 2024 Annual Meeting. If elected at the 2024 Annual Meeting, each of the Class II director nominees will serve until our 2027 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 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.

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 MELI Code, provide the framework for the governance of our Company. Copies of our corporate governance guidelines, the charters of our board committees, and our MELI Code may be found on our investor relations website at http://investor.mercadolibre.com. 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. 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.

As illustrated by the director biographies, the director skills highlights and the diversity matrix, our board of directors is comprised of a diverse group of individuals with significant experience in their respective fields. Our board believes that the combination of different tenures, backgrounds, skills, expertise and experiences of the directors and the director nominees contribute to an effective board that comprehends the complexities of our business and of the region in which we operate. The Company believes that the directors and director nominees have all the necessary qualifications to provide effective and independent oversight and strategic guidance to help build a better business.

We believe 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. Therefore, our board will continually evaluate the leadership structure of the board with the goal of maximizing its effectiveness and alignment with the Company's needs.

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. In light of the competitive and dynamic environment in which our Company operates, the appropriate board leadership structure may vary from time to time as circumstances warrant and we believe that any determination in this regard is part of the executive succession planning process. 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 Company and our stockholders. Mr. Galperin co-founded our 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 stakeholders.

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. Mr. Calemzuk joined our board in 2007. During his tenure, he has gained extensive knowledge and deep understanding of the Company and its business. As lead independent director, he coordinates the activities of the other independent directors; presides at all meetings of the board at which the chairman is not present; serves as liaison between the chairman and the independent directors; consults with the chairman on the agenda for board meetings; serves as the board’s liaison for consultation and communication with stockholders, as appropriate; and communicates regularly with each director to be certain that each director’s views, competencies and priorities are understood. In addition, the lead independent director, who is also the chairman of the nominating and corporate governance committee, obtains self-assessment questionnaires and 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.

We believe that our current board leadership structure provides effective, constructive and independent oversight of management and the Company.

Board Committees

Board committees help our board perform effectively and efficiently, but they 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 principal standing committee meets regularly and has a written charter that has been approved by our board and is reviewed annually, 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 members of each of our three principal standing board committees as of the filing date of this Proxy Statement:

During fiscal year 2023, Messrs. Calemzuk (Chairman), Vazquez and Ms. Segal served as members of our compensation committee. None of the members of our compensation committee during fiscal year 2023 has ever been an officer or employee of our Company or our subsidiaries or had any relationship with us requiring disclosure as a related party transaction under applicable rules of the SEC. During fiscal year 2023, none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served on our compensation committee; none of our executive officers served as a director of another entity, one of whose executive officers served on our compensation committee; and none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served as a member of our board. All members of our compensation committee during fiscal year 2023 are independent in accordance with the applicable rules of NASDAQ and our corporate governance guidelines.

Our board of directors, both directly and through its committees, 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, both directly and also at the committee level, in overseeing management of our material risks. The board reviews information regarding our operations, strategic plans and financial position, as well as the risks associated with each on a quarterly basis. The board is also updated on Environmental, Social and Governance (“ESG”) risks and opportunities on an as needed basis.

Our risk oversight processes are aligned with best practices established by COSO (Committee of Sponsoring Organizations of the Treadway Commission) and ISO 31,000, and are consistent with the corporate culture of MercadoLibre.

Every year, we

Periodically, the audit committee (directly and/ or through its chairman) is informed about major risk exposures, and the action plans taken to manage such exposures.

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 Company and our stockholders. The nominating and corporate governance committee annually leads the process of evaluating the performance of the board as a whole 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.

Succession Planning

The board recognizes the importance of effective executive leadership to MercadoLibre’s success, and meets to discuss executive succession planning annually or more frequently as it deems appropriate. 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 team, including the chief executive officer. Our board, together with the nominating and corporate

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.

Our board held four meetings and took three actions by written consent during the fiscal year ended December 31, 2023. 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 2023.

Attendance at Annual Meetings

We do not have a policy regarding director attendance at annual meetings of our stockholders. Two members of our board of directors attended our 2023 Annual Meeting of Stockholders.

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.

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, WTC Free Zone Dr. Luis Bonavita 1294, Of. 1733, Tower II Montevideo, Uruguay, 11300. The chairman of the nominating and corporate governance committee and their duly authorized agents are responsible for collecting and organizing shareholder communications. The nominating and corporate governance committee has in turn delegated responsibility for initial review of stockholder communications to our head of 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, our head of Investor 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. Absent a conflict of interest, the chairman of the nominating and corporate governance committee is responsible for evaluating the materiality of each shareholder communication and determining whether further distribution is appropriate, and, if so, whether to the full board, one or more board members and/or other individuals or entities.

Director 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.

On August 2, 2022, the board, upon the recommendation of our compensation committee, approved a director compensation program for our independent directors for service during the one year periods commencing at the Company’s annual shareholders’ meeting in 2022, 2023 and 2024. Under the terms of the director compensation program, for each full year of service each independent director will receive (i) a cash retainer fee of $72,000 and (ii) shares of our common stock having a target value equal to $120,000 based on the market value of the Company’s stock as of the date of grant. Such shares shall be subject to forfeiture and transfer restrictions until the date of the annual shareholders’ meeting taking place in the year after the year during which the independent director was granted such shares. Additionally, the board reapproved the payment of additional annual cash retainer fees to each individual serving the board in one of the following capacities.

The compensation committee reviews our director compensation policy every three years with the primary objective of matching compensation levels to the relative demands associated with serving on our board and its various committees.

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.

The following table summarizes compensation earned by our non-employee directors for the fiscal year ended December 31, 2023. Mr. Nicolás Galperin receives no compensation for his service on the board, in accordance with our policy not to compensate non-independent directors, and is not included in this table.

Our board has adopted a code of ethics (the “MELI Code” or “Code”) that applies to our officers, directors and employees. Among other matters, our Code is designed to deter wrongdoing and to promote:

In February, 2023 our Board of Directors approved an updated version of our Code. This version maintains substantially the same provisions as the former, but expressed in plain language, with concrete examples and in a friendly visual design that facilitates its understanding by our teams. It also includes specific references to ESG matters, trade compliance and human rights, and sets forth particular provisions addressed to handle new realities, such as a hybrid work environment.

We have carried out an internal process to obtain each of our employees´ formal acceptance of the Code. Also, we launched a new mandatory online training to ensure employees are aware of the code. The training covers ethical business standards that MercadoLibre requires of its employees such as anti-corruption guidelines, conflict of interest and confidential information standards and procedures, among others.

Our audit committee must approve any waiver of the Code 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 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.

Transparency

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.

Corporate Hotline

We have an anonymous and confidential whistleblower hotline for employees and third parties to report illegal or unethical behaviors. Complaints received through the hotline are analyzed and investigated by a compliance team appointed by the Head of Risk and Compliance for that purpose. If the investigation confirms any wrongdoing, a report is issued to management with a recommendation of corrective actions that aim to remedy the situation and/or identify and control any other irregularities. Management then considers the recommendations in the report and implements steps to remediate.

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 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

Conflicts of Interest

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 to ensure that it provides clear guidance to our directors, executives and employees.

Anti-Hedging and Anti-Pledging Policies and Practices

Our directors, executive officers, vice presidents and certain other persons as our General Counsel may designate from time to time are strongly discouraged from engaging in hedging transactions with respect to Company securities. Such persons are also strongly discouraged from pledging Company securities in any way as collateral for a loan or from holding Company securities in a margin account. In addition, MercadoLibre requires all such persons to refrain from entering into any of the aforementioned transactions, even during the trading window, unless they have pre-cleared the transaction with General Counsel. Short sales of Company securities are prohibited for our directors and all of our employees (including officers).

Certain Relationships and Related Transactions

We have entered into indemnification agreements with each of our directors and executive officers that obligate us to indemnify them to the fullest extent permitted by Delaware law.

The board has delegated to the audit committee the responsibility to review and approve all transactions or series of transactions in which we or a subsidiary is a participant, the amount involved exceeds $120,000 and a “related person” (as defined in Item 404 of Regulation S-K) has a direct or indirect material interest. As set forth in the audit committee charter, transactions that fall within this definition will be referred to the audit committee for approval, ratification or other action. Based on its consideration of all of the relevant facts and circumstances, the audit committee will decide whether or not to approve the transaction and will approve only those transactions that are in the best interests of our Company.

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, 2023 through December 31, 2023, all Section 16(a) filing requirements applicable to our officers, directors and greater-than-10% beneficial owners were complied with on a timely basis. For the period from January 1, 2024 through the date of this proxy statement, we believe that all Section 16(a) filing requirements applicable to our officers, directors and greater-than-10% beneficial owners have been complied with on a timely basis.

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. Unless indicated otherwise in the footnotes, the address of each individual listed in the table is c/o MercadoLibre, Inc., WTC Free Zone Dr. Luis Bonavita 1294, Of. 1733, Tower II Montevideo, Uruguay, 11300.

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 2023 and the processes used by our compensation committee when making compensation decisions.

The named executive officers in this proxy statement are:

Mr. Arnt resigned from his position as Executive Vice President and Chief Financial Officer of the Company, effective August 10, 2023, in order to pursue a new opportunity. On August 10, 2023, the board of directors of the Company appointed Martín de los Santos, who was serving as the Company’s Senior Vice President of Mercado Credito, to serve as Senior Vice President and Chief Financial Officer, effective August 10, 2023. In January 2024, Mr. de los Santos was appointed as an Executive Vice President and Chief Financial Officer.

The Executive Summary below provides an overview of our performance during 2023 and its correlation to our compensation decisions and practices.

At the 2023 Annual Meeting of Stockholders, stockholders approved our 2022 advisory vote on executive compensation with approximately 84.74% of the votes cast in favor. We believe that strong support of our stockholders for the 2022 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.

As discussed in more detail below, our 2023 executive compensation program is comprised of three different compensation elements:

In making its compensation decisions for the 2023 performance year, the compensation committee recognized our Company’s 2023 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 2023 executive compensation program:

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 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.

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 perspectives 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.

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 2023, we carried out a study with Mercer to revisit and introduce changes to our previous compensation peer group based on public information available about the size of revenues, market capitalization and related industry of each selected company, resulting in a list of companies that we considered when analyzing and making decisions relating to our 2023 compensation process. The companies include: Airbnb, Inc., Block, Inc., Booking Holdings Inc., Discover Financial Services, eBay Inc., Fidelity National Information Services, Inc., Fiserv, Inc., Global Payments Inc., Intuit Inc., PayPal Holdings, Inc., Pinterest, Inc., ServiceNow, Inc., Shopify Inc., Uber Technologies, Inc., Workday, Inc., Zoom Video Communications, Inc., Coupang, Inc. and Naspers Limited.

We also participate and analyze different surveys of market compensation practices in our industry and broadly across all industries. To determine 2023 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.

The following table summarizes the various elements of compensation paid to our named executive officers, in each of 2023, 2022 and 2021. 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.

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 2023, 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.

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 2023, the compensation committee selected the following as the corporate performance (the “Consolidated Corporate Performance”) measures:

The Consolidated Corporate Performance measure is calculated as a weighted average of the metrics described above (as set forth below in “Weighting of 2023 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 2021 and 2022 measures:

Between 2022 and 2023, the Net revenues metric was changed from adjusted (defined as our net revenues net of the transportation costs charged by third-party carriers, including those charges presented in gross basis) to as reported, both measured in constant dollars.

The following table describes the components of each named executive officer’s 2023 annual bonus and the percentage weight of each element:

The following table sets forth the target levels for the various performance metrics (the “Minimum Eligibility Conditions”) included in the Company performance goals for 2023 and actual performance realized against those targets:

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:

The following table sets forth the nominal target value of the 2023 LTRP bonus and the portion of the 2023 LTRP bonus paid out for 2023 for each named executive officer:

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, 2023, as incorporated by reference from this proxy statement.

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. The compensation committee has assessed our compensation policies and practices for our employees in 2023 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.