Ariel Szarfsztejn
MERCADOLIBREAbout Ariel Szarfsztejn
Ariel Szarfsztejn is Commerce President at MercadoLibre (MELI), age 43, serving in this role since January 2024 after rising through commerce and logistics leadership since 2017. He holds a cum laude Economics degree from the University of Buenos Aires and an MBA from Stanford GSB, with prior experience at Despegar (managing the hotels business) and Boston Consulting Group in Latin America . Executive pay is tied to company performance via annual bonuses (weighted by Net Revenues & Financial Income, Income from Operations, Total Payment Volume, and Competitive NPS) and a six‑year cash LTRP whose variable portion moves with MELI’s 60‑day average stock price, embedding TSR alignment . In 2024 the company delivered Net Revenues & Financial Income of $21,940.4MM vs $21,420.0MM target, TPV‑adjusted of $200,118.4MM vs $191,402.1MM target, and Competitive NPS of 66.2% vs 63.1% target, while Income from Operations was $4,864.1MM vs $5,232.2MM target; the weighted overall performance was 96.6% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| MercadoLibre | Commerce President | 2024–present | Leads commerce P&L and growth in LatAm marketplaces |
| MercadoLibre | EVP, Commerce | 2022–2023 | Drove marketplace expansion and monetization |
| MercadoLibre | SVP & Head, Mercado Envios | 2020–2021 | Scaled proprietary logistics network to support commerce growth |
| MercadoLibre | VP, Mercado Envios | 2018–2020 | Built shipping and fulfillment capabilities across markets |
| MercadoLibre | VP, Strategy & Corp Dev | 2017 | Led strategy and corporate development initiatives |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Despegar (NYSE: DESP) | Managed Hotels Business Unit | Prior to 2017 | Drove travel category operations and revenue |
| Boston Consulting Group | Strategy Consulting (LatAm) | Prior to Despegar | Led strategy projects across sectors in the region |
Fixed Compensation
| Component | 2024 Value | Notes |
|---|---|---|
| Base Salary (USD) | $630,100 | Paid in ARS, disclosed in USD at average 2024 FX |
| Target Annual Bonus (USD) | $200,180 | 2024 plan-based target; threshold $50,045, max $300,270 |
| Actual Annual Bonus Paid (USD) | $177,960 | Earned for FY2024, paid in 1Q25 |
| All Other Compensation (USD) | $90,018 | Life insurance premiums ($3,396) + retirement contributions ($86,622) |
Performance Compensation
Annual Bonus Design and Results (FY2024)
| Metric | Weight | Target | Actual | Achievement % | Notes |
|---|---|---|---|---|---|
| Net Revenues & Financial Income (USD MM, constant) | 40% | 21,420.0 | 21,940.4 | 102.4% | Argentina deflated; reclass changes in 2024 |
| Income from Operations (USD MM, constant) | 35% | 5,232.2 | 4,864.1 | 84.2% | Measured by country share to reduce Argentina dependency |
| Total Payment Volume – adjusted (USD MM, constant) | 10% | 191,402.1 | 200,118.4 | 104.6% | Excludes P2P; constant dollars, Argentina deflated |
| Competitive NPS (%) | 15% | 63.1% | 66.2% | 105.0% | Independent surveys (Ipsos, Megaresearch, Netquest) |
| Weighted Overall Performance | 100% | 84.9% minimum | 96.6% | — | Payment capped at 100% for bonus purposes |
| Individual Performance Multiplier | — | — | 1.0 | — | “Meets Expectations” for Szarfsztejn |
| Annual Bonus Paid (USD) | — | — | 177,960 | — | Paid in 2025 for FY2024 |
Long‑Term Retention Program (LTRP) — Structure and Vesting
| Item | Detail |
|---|---|
| Design | 6 annual payments conditioned on continued employment; two components each year: Fixed 16.66% of half of target; Variable 16.66% of half of target × (Applicable Year Stock Price ÷ baseline) |
| 2024 LTRP Baseline | $1,426.11 = avg closing price over the final 60 trading days of 2023 |
| 2024 LTRP Target (Nominal) | $3,500,000 |
| 2024 LTRP Portion Paid (USD) | $689,347 |
| Equity Grants to NEOs in 2024 | None |
| 2025 LTRP Target (Nominal) | $5,000,000 |
| 2025 Annual Bonus Target | 4 months of base salary (33.33%) with ±50% individual adjustment; metrics unchanged (Net Revenues & Financial Income, Income from Operations, TPV‑adjusted, Competitive NPS) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 76 shares; less than 1% of outstanding |
| Shares Outstanding (ref.) | 50,697,375 as of April 14, 2025 |
| Footnotes | Includes one share in the form of 60 CEDEARs |
| Hedging/Pledging Policy | Executives strongly discouraged from hedging/pledging; short sales prohibited; pre‑clearance required even within trading windows |
| Pledging (individual) | No pledging disclosed for Szarfsztejn; contrast: Passos Tolda disclosed a prepaid variable forward secured by 20,000 shares |
| Ownership Guidelines | Not disclosed for executives; no perquisite stock awards in 2024 (NEOs) |
Employment Terms
Severance and Change‑of‑Control Economics
| Scenario | Salary/Severance (USD) | Non‑Equity Incentive (USD) | Total (USD) | Notes |
|---|---|---|---|---|
| Termination without Cause (local law) | 575,620 | — | 575,620 | Local law severance |
| Change in Control (CIC) — awards at 50% | — | 4,309,980 | 4,309,980 | 50% of outstanding LTRP awards at CIC, valued on 2024 60‑day avg |
| CIC + Termination without Cause or Resignation for Good Reason | 575,620 | 8,619,959 | 9,195,579 | 100% of outstanding LTRP awards; payable per schedule/within 4 business days post termination |
Restrictive Covenants and Clawback
- Non‑compete and non‑solicit: LTRP provides forfeiture if the executive competes during employment or within one year post‑employment; or solicits/hire attempts during/after employment .
- Clawback: SEC/Nasdaq‑compliant policy effective Oct 2, 2023; recovery required for erroneously awarded incentive compensation upon accounting restatement regardless of misconduct .
Benefits and Perquisites
- Executive perquisites: Company states it provides no executive perquisites; broad‑based benefits include health insurance, executive education, vehicles under eco‑friendly policy .
- Life insurance: Company‑paid premiums ($3,396 in 2024); coverage $1,132,000; additional $1,132,000 for accidental death/total permanent disability .
- Retirement benefit: Company contributions equal to 11.5% of base salary + annual bonus; 2024 contributions $86,622; hypothetical accumulated benefit if retired 12/31/2024 estimated at $382,764 .
Compensation Structure vs Performance Metrics
- Bonus metrics and weights: Net Revenues & Financial Income (40%), Income from Operations (35%), TPV‑adjusted (10%), Competitive NPS (15); overall performance computed in constant dollars; Argentina deflated; 2024 weighted performance 96.6% with Szarfsztejn’s individual multiplier at 1.0 .
- LTRP linkage to TSR: Variable portion moves with the ratio of the applicable year’s 60‑day average closing price to a baseline (e.g., $1,426.11 for the 2024 LTRP), reinforcing stock price alignment over six years .
- Peer group benchmarking: Compensation committee uses a Mercer‑informed peer set including Airbnb, Block, Booking Holdings, Discover, eBay, FIS, Fiserv, Global Payments, Intuit, PayPal, Pinterest, ServiceNow, Shopify, Uber, Workday, Zoom, Coupang, and Naspers to calibrate competitiveness .
Track Record, Value Creation, and Execution Risk
- Logistics scaling: Led Mercado Envios from VP through SVP, contributing to MELI’s logistics as a core competitive advantage supporting commerce growth .
- Commerce leadership: Elevated to EVP and then President of Commerce, overseeing marketplace expansion and monetization across LatAm .
- 2024 outcomes: Company achieved outperformance on Net Revenues & Financial Income, TPV‑adjusted, and Competitive NPS vs targets; Income from Operations under target, yielding 96.6% overall performance and a paid annual bonus of $177,960 for Szarfsztejn .
Say‑on‑Pay & Shareholder Feedback
- 2024 annual meeting: 83.81% of votes cast supported the company’s 2023 advisory vote on executive compensation, indicating broad investor support for pay practices .
- Compensation committee oversight and report: Independent committee administers pay policies and recommended CD&A inclusion in the 2024 Form 10‑K .
Equity Ownership & Alignment Table (Detail)
| Item | Data |
|---|---|
| Shares Beneficially Owned | 76 (including CEDEARs referenced) |
| Ownership % | Less than 1% (aggregate shares outstanding 50,697,375) |
| Vested/Unvested Equity | No executive equity awards granted in 2024; LTRP is cash‑based |
| Options (Exercisable/Unexercisable) | Not disclosed; company relies on cash LTRP for NEOs |
| Pledged/Hedged | No pledging disclosed for Szarfsztejn; strong anti‑hedging/anti‑pledging policy applies |
Employment Terms Summary
| Provision | Key Terms |
|---|---|
| Severance | Local law severance if terminated without cause (USD 575,620) |
| CIC — Single vs Double Trigger | Partial (50%) payout on CIC; full (100%) payout if CIC plus termination without Cause or resignation for Good Reason within specified window |
| Good Reason Definition | Material diminution of duties, pay reduction, or relocation >50 miles, with notice/cure periods |
| Forfeiture/Non‑compete/Non‑solicit | Forfeiture of LTRP for competition during employment or 1‑year post‑employment, or employee solicitation/hire attempts |
| Clawback | SEC/Nasdaq‑compliant clawback for erroneously awarded incentive compensation |
Investment Implications
- Strong pay‑for‑performance alignment via LTRP: Six‑year cash awards with a variable leg indexed to MELI’s 60‑day average stock price materially align incentives with TSR and long‑term value creation; 2025 LTRP target raised to $5.0M, reinforcing retention .
- Limited insider selling pressure: With no new executive equity grants in 2024 and modest direct share holdings (76 shares), near‑term selling pressure from Szarfsztejn appears minimal; anti‑hedging/anti‑pledging policies further reduce misalignment risk .
- Retention and CIC risk management: Explicit local law severance, robust CIC mechanics (partial/full LTRP acceleration), and restrictive covenants (non‑compete/non‑solicit) balance retention incentives with risk controls; total CIC + termination exposure of ~$9.2M is notable but consistent with sector practices .
- Execution focus: 2024 performance beat revenue/TPV/NPS targets but missed operating income, highlighting margin discipline as a lever for future bonus outcomes; Szarfsztejn’s logistics pedigree suggests continued focus on cost and service quality within commerce .