What determines Mercenary Rank?

It is entirely based off of your income. It's sort of a silly way to rank it, honestly. It means that if you go in a mission and don't shoot anythig and don't get hurt because you just stand and do nothing, you'll get a higher income and consequently higher rank than someone who actually works their butt off in a mission. You can check your mercenary rank by going to the Leaderboards section on the World menu. A method I've used to raise my rank is to create an AC with a very low repair cost, and go in with that. That means using Junk Parts, though, so be careful not to get slammed by anything too powerful.