Notice of Annual Meeting of Shareholders The 2023 Annual Meeting of Shareholders of Trustmark Corporation (Trustmark) will be held as follows: DATE AND TIME Tuesday, April LOCATION Trustmark Jackson, Mississippi ITEMS OF BUSINESS 1) 2) 3) 4) To approve an amendment and restatement of Trustmark’s articles of incorporation to provide for exculpation of directors in accordance with Mississippi law. 5) To ratify the selection of Crowe 6) RECORD DATE Shareholders of record on March 1, 2023, are entitled to notice of and to vote at the Annual Meeting. PROXY VOTING/REVOCATION Your vote is important. You are urged to vote your shares as soon as possible, whether or not you plan to attend the meeting. Please vote your shares in one of the following ways: Via Internet by following the instructions on the Notice of Internet Availability or proxy card. Via your smartphone by following the instructions on the Notice of Internet Availability or proxy card. If you received a printed copy of the proxy statement, you may also vote your shares by signing and returning the enclosed proxy card in the reply envelope provided. If you attend the meeting, you may revoke your proxy prior to the voting thereof. You may also revoke your proxy by following the instructions on page 4 of the proxy statement. Granville Tate, Jr. Secretary March 15, 2023 Trustmark Corporation P. O. Box 291 Jackson, Mississippi 39205 March 15, 2023 Dear Shareholder: On behalf of your Board of Directors, we cordially invite you to attend Trustmark’s Annual Shareholders’ Meeting at Trustmark’s Corporate Office, 248 East Capitol Street, Jackson, Mississippi 39201, on April 25, 2023, at 1:00 p.m. CT. At the meeting, you will have the opportunity to elect 11 directors who bring diverse perspectives and valuable leadership skills to Trustmark. Their guidance will enable us to successfully compete in an evolving industry and continue our steadfast commitment to the customers, associates, shareholders and communities we have the privilege of serving. Your vote is important to us. The proposals to be considered are described in this proxy statement, and instructions on how to vote your shares may be found on page 4. We encourage you to vote your shares in advance of the meeting to ensure the presence of a quorum. We made significant progress across the organization during the year. Loan growth in 2022 was the highest in Trustmark’s history. Credit quality remained strong. Net interest income and the net interest margin were up significantly. Our insurance business posted another record year. We made significant investments in technology, including conversion to a state-of-the-art loan system designed to enhance efficiency and productivity. With all of these positive advancements, our financial results were overshadowed by a settlement that, pending court approval, will resolve all current and potential future claims relating to litigation involving the Stanford Financial Group that began in 2009. While we expressly deny any liability or wrongdoing with respect to this matter, we believe the settlement is in the best interest of Trustmark and our shareholders as it eliminates risk, ongoing expense and uncertainty. With this matter now behind us, we will focus more intently on the future and the opportunities that are ahead. Trustmark is very well-positioned to serve and expand its customer base and create long-term value for shareholders. We invite you to review our Form 10-K and our 2022 Year in Review, both of which are available at investorrelations.trustmark.com or in hard copy upon request. These documents will provide more detailed information about your company. Thank you for your continued support of Trustmark and your participation in this important process. Sincerely, Gerard R. Host Duane A. Dewey President and Chief Executive Officer Environmental, Social and Governance/Corporate Social Responsibility (ESG/CSR) Environmental, Social and Governance/Corporate Social Responsibility (ESG/CSR) PROXY SUMMARY This summary highlights information contained elsewhere in this proxy statement. Please read the entire proxy statement carefully before voting as this is only a summary. Information About the 2023 Annual Meeting Time/Date: Tuesday, April 25, 2023, at 1:00 p.m. CT Location: Trustmark Corporate Office, 248 East Capitol Street, Jackson, Mississippi 39201 Record Date: March 1, 2023 Proposals (for each nominee) Financial Highlights – 2022 Loans held for investment (HFI) increased $2.0 billion, or 19.1%, in 2022 Nonperforming assets declined to 0.55% of loans HFI and held for sale (HFS) Net charge-offs represented 0.01% of average loans in 2022 Net interest income FTE totaled $507.1 million, up 17.9% in 2022 to produce a net interest margin of 3.17%, up 41 basis points from 2021 Insurance revenue increased 10.7% in 2022 while wealth management revenue remained stable Noninterest income totaled $205.1 million and represented 29.3% of total revenue Revenue totaled $699.9 million in 2022, up 9.3% from the prior year Noninterest expense, excluding litigation settlement expense of $100.8 million, totaled $502.5 million, up 2.7% from the prior year Net income totaled $71.9 million, representing diluted earnings per share of $1.17. Excluding litigation settlement expense, which reduced net income by $75.6 million, net income totaled $147.5 million, representing diluted earnings per share of $2.40. Information regarding the litigation settlement is included in Trustmark’s Current Report on Form 8-K filed on January 3, 2023. Paid quarterly dividend of $0.23 per share, or $0.92 per share annually Maintained strong capital position with CET1 ratio of 9.74% and total risk-based capital ratio of 11.91% Expanded market optimization efforts with a net reduction of 11 branch offices during the year Continued technology investments to enhance efficiency and productivity Corporate Governance Highlights Eight members of the Board of Directors of Trustmark (the Board) are independent. Directors must notify Trustmark of changes in professional responsibilities and residence and comply with a directors’ attendance policy. A CEO succession planning process is in place to promote continuity of leadership and an orderly transition upon the CEO’s retirement or other termination of employment. The Board has the authority to seek advice or counsel from external advisors as needed. 1 Following a comprehensive review, as of January 1, 2023, the Board approved a number of changes in the Board’s governance structure and processes to enhance its effectiveness in providing oversight and strategic advice to management. See “Corporate Governance – Overview” on page 4. Directors are subject to Trustmark stock ownership requirements. The Board has adopted, and annually reviews, formal charters for the Board and its committees to address the governance guidelines and responsibilities of each. Directors are required to retire at the age of 75. Executive Compensation Highlights What we do: In the event the Board Chair is not independent, the Board’s Lead Director, who is independent, shall serve as Chair of the Executive Committee and the Nominating & Governance Committee. Independent directors meet without management present. The Board has adopted codes of conduct/ethics for directors, senior financial officers, and associates. The Nominating & Governance Committee of the Board reviews the corporate governance structure and annually evaluates each director’s performance against specific performance criteria designed to evaluate the director’s contributions. What we don’t do: No automatic or guaranteed annual salary increases No guaranteed bonuses or guaranteed long-term incentive awards No tax gross-ups for executive officers No “single-trigger” change in control severance payments No hedging of Trustmark stock No excessive perquisites Environmental, Social and Governance/Corporate Social Responsibility (ESG/CSR) Committed to robust community engagement, informed policies and procedures, and responsible philanthropy to strengthen communities Produced and published first annual CSR Impact Report Contributed more than $4 million in 2022 to community-based programs and sponsorships with focus on supporting at-risk children and families and financial literacy initiatives Provided continued financial literacy and individual counseling through partnership with Operation HOPE, Inc., in Memphis, TN, Montgomery, AL and Jackson, MS in 2022 Dedicated to serving diverse and underserved communities; enhanced product offerings to meet special credit needs of low-to-moderate income individuals and communities Facilitated financial literacy classes through EVERFI, Inc., engaging schools throughout Mississippi in Trustmark’s Financial Scholars program in 2022 Engaged in collaborative relationships through the Office of the Comptroller of the Currency’s (OCC) Project REACh initiative with minority depository institutions in Houston, TX and Mobile, AL to expand access to credit and capital 2 GENERAL INFORMATION Trustmark Corporation (Trustmark) is holding its 2023 Annual Meeting of Shareholders (the Annual Meeting) on Tuesday, April 25, 2023. This proxy statement is being sent on or about March Trustmark is furnishing this proxy statement over the Internet to most shareholders. These shareholders will not receive printed copies of the proxy statement and proxy card, and instead will receive a Notice of Internet Availability of Proxy Materials containing instructions on how to access the proxy materials over the Internet. If you received a Notice of Internet Availability Meeting Location, Date and Time The Annual Meeting will be held Shareholders of record at the close of business on A majority of the shares outstanding and entitled to vote constitutes a The required vote for each proposal Directors must receive a majority of the votes cast in order to be elected (that is, the number of shares voted “for” a director must exceed the number of shares voted “against” that director). If a nominee who is an incumbent director is not elected, and no successor is elected, such nominee must tender his or her resignation to the Board. For additional information, please see “Proposal 1: Election of Directors” on page 14. The advisory vote to approve Trustmark’s executive compensation will be approved if the votes cast in favor of the proposal exceed the votes cast opposing the proposal. For the advisory vote on the frequency of advisory votes on executive compensation, the option of every one year, every two years or every three years that receives the highest number of votes cast will be the frequency that is recommended by the shareholders. The amendment and restatement of Trustmark’s articles of incorporation will be approved if the votes cast in favor of the proposal exceed the votes cast opposing the proposal. The ratification of the selection of Crowe LLP (Crowe) as independent auditor will be approved if the votes cast in favor of the proposal exceed the votes cast opposing the proposal. While abstentions and broker non-votes are counted as shares present at the meeting for purposes of determining a quorum, they are not otherwise counted and, therefore, will have no effect on the outcome of the election of directors or any other proposal. Applicable rules determine whether proposals presented at shareholder meetings are considered routine or non-routine. If a proposal is considered routine, a bank, broker or other holder of record which holds shares for an owner in street name generally may vote on the proposal without receiving voting instructions from the beneficial owner. If a proposal is non-routine, the bank, broker or other holder of record generally may vote on the proposal only if the beneficial owner has provided voting instructions. A “broker non-vote” occurs when a broker or other entity returns a signed proxy card but does not vote shares on a particular proposal because the proposal is not a routine matter and the broker or other entity has not received voting instructions from the beneficial owner of the shares. The ratification of the selection of Crowe All valid proxies received by Trustmark will be voted in accordance with the instructions indicated in such proxies. As noted above, if you hold your shares through a bank, broker or other holder of record and you do not give voting instructions, your bank, broker or other record holder of the shares is not permitted to vote your shares on any proposal other than Proposal 5, which is the only routine proposal on the agenda. If no instructions are indicated in an otherwise properly executed proxy, it will be voted FOR 3 How to Vote Shareholders of record can vote To vote by proxy: Vote by Internet (instructions are on the Notice of Internet Availability or the proxy card), Vote using your smartphone (instructions are on the Notice of Internet Availability or the proxy card), Vote at the meeting (instructions are on the Notice of Internet Availability or the proxy card), or If you received a printed copy of If you hold your shares through a bank, broker or other holder of record, your bank, broker or You will receive multiple Notices of Internet Availability or printed copies of the proxy materials if you hold your shares in different ways (e.g., individually, by joint tenancy, through a trust or custodial account, etc.) or in multiple accounts. Please vote the shares represented by each Notice of Internet Availability or proxy card you receive to ensure that all of your shares are voted. If you hold your shares through a bank, broker or other holder of record, your ability to revoke your proxy depends on the voting procedures of the bank, broker or other holder of record. Please follow the directions provided to you The Board CORPORATE GOVERNANCE Overview During 2022, the Board undertook a comprehensive review of Board and committee processes designed to expand Board engagement and provide additional focus on value-enhancing and forward-looking activities. Trustmark’s revised governance structure enables the Board human capital, enterprise risk management, and technology, among others. This is accomplished through ·Providing strategic guidance and oversight · Ensuring that management’s operations contribute to Trustmark’s financial soundness ·Acting as a resource on strategic issues and in matters of planning and ·Promoting social responsibility and ethical business conduct ·Providing insight and guidance on complex business issues and problems in the banking and financial services industries ·Ensuring that an effective system is in place to facilitate the selection, succession planning and compensation of the Chief Executive Officer (CEO) · Monitoring risks facing Trustmark and providing oversight of Trustmark’s stress testing and other risk evaluation processes ·Ensuring Trustmark’s compliance with all relevant legal and regulatory Key Features of Trustmark’s Corporate Governance Trustmark’s governance structure has a number of key features that are designed to ensure effective and efficient oversight of the company, including the following: Eight members of the Board are independent. Directors are subject to Trustmark stock ownership requirements, as described under the heading “Director Compensation.” The Board has adopted, and annually reviews, formal charters for the Board and its committees to address the governance guidelines and responsibilities of each. Trustmark’s bylaws and Board Charter provide that when the Board Chair is also the CEO, or otherwise is not independent, as is the case currently, the Chair of the Executive Committee and Nominating & Governance Committee, who shall be an independent director, serves as Lead Director. See “Board Leadership” on page 6 for additional information. Directors must notify Trustmark of changes in professional responsibilities and residence and are expected to comply with a directors’ attendance policy. The Board has adopted codes of conduct/ethics for directors, senior financial officers and associates. The Board has the authority to seek advice or counsel from external advisors as needed. Trustmark has a CEO succession planning process to promote continuity of leadership and an orderly transition upon the CEO’s retirement or other termination of employment. Directors are required to retire at the age of 75. Independent directors meet without management present. In 2022, the Executive Committee reviewed the corporate governance structure and evaluated each director’s performance against specific performance criteria designed to evaluate the director’s contributions to the Board’s deliberations and processes. As of January 1, 2023, these responsibilities are performed by the Nominating & Governance Committee. The Trustmark intends to provide required disclosure of any amendment to or waiver of its codes of conduct/ethics that applies to the the Securities and Exchange Commission (SEC) Meetings of the Board of Directors The Board met 5 Director Attendance at the Annual Meeting Directors are expected to attend the Annual Meeting, and in 2022, all Directors were present at the annual meeting of The Board has Adolphus B. Baker Tracy T. Conerly Harris V. Morrissette William A. Brown Marcelo Eduardo Richard H. Puckett Augustus L. Collins J. Clay Hays, Jr., M.D. In conjunction with these independence determinations, the Board considered certain relationships, including through family members and business affiliates, that (i) Messrs. Brown and Puckett, General Collins, Dr. Hays, and Mrs. Conerly have, and Ms. Cooley had, as customers of Fisher Brown Bottrell Insurance, Inc. (Fisher Brown Bottrell), a subsidiary of Trustmark National Bank (the Bank), and (ii) Messrs. Baker, Brown, Eduardo and Puckett, General Collins and Dr. Hays have as customers of the Under Trustmark’s governance guidelines, which are contained in the Board Charter, the Board has the responsibility to determine the most appropriate leadership structure for the company, including whether it is best for the company at a given point in time for the roles of Board Trustmark’s Board Charter and Committees of the Board of Directors Audit Committee The Audit Committee meets regularly throughout the year, including meeting with the Sole responsibility for the appointment, compensation, retention and oversight of the work of the external auditor. Assuring the objectivity and independence of the internal audit department and the external auditor. Reviewing and concurring in the appointment, replacement, reassignment, performance or dismissal of the Chief Audit Executive, who reports directly to the Committee. Inquiring of management, the Chief Audit Executive, and the external auditor about significant risks or exposures related to the consolidated financial statements and assessing steps that management has taken to minimize such risks to Trustmark. 6Filed by the RegistrantþFiled by a Party other than the Registrant¨Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐ þ☒Preliminary Proxy Statement ¨☐¨☐Definitive Proxy Statement ¨☐Definitive Additional Materials ¨☐ (Name of Person(s) Filing Proxy Statement, if other than Registrant) þ☒No fee required. ¨Fee computed on table below per Exchange Act Rules14a-6(i)(4) and0-11.(1)Title of each class of securities to which transaction applies:(2)Aggregate number of securities to which transaction applies:(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):(4)Proposed maximum aggregate value of transaction:(5)Total fee paid:¨☐Fee paid previously with preliminary materialsmaterials.¨☐Check box if any part of the fee is offset as providedFee computed on table in exhibit required by Item 25(b) per Exchange Act Rule0-11(a)(2)Rules 14a-6(i)(1) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.0-11.1)Amount Previously Paid:2)Form, Schedule or Registration No.:3)Filing Party:4)Date Filed: NOTICE OF ANNUAL MEETING OF SHAREHOLDERSThe 2016 Annual Meeting of Shareholders of Trustmark Corporation (Trustmark) will be held as follows:26, 2016,25, 2023, at 2:1:00 p.m. CTConference CenterCorporate OfficeMississippi Sports Hall of Fame1152 Lakeland Drive248 East Capitol Street3921639201 To elect a board of eleven11 directors to hold office for the ensuing year or until their successors are elected and qualified.To provide advisory approval of Trustmark’s executive compensation. To provide an advisory vote on the frequency of advisory votes on Trustmark’s executive compensation. Horwath LLP as Trustmark’s independent auditor for the fiscal year ending December 31, 2016.4)To approve an amendment to Trustmark’s articles of incorporation to require majority voting in uncontested director elections.5)To approve an amendment to Trustmark’s articles of incorporation to eliminate cumulative voting in director elections.2023. To transact such other business as may properly come before the meeting. RECORD DATEShareholders of record on February 16, 2016, are eligible to vote at the meeting in person or by proxy.PROXY VOTING/REVOCATION• You are urged to vote your shares as soon as possible, whether or not you plan to attend the meeting. You may vote your shares by Internet by following the instructions on the Notice of Internet Availability or proxy card.•If you received a printed copy of the proxy statement, you may also vote your shares by signing and returning the enclosed proxy card in the enclosed reply envelope.•If you do attend the meeting, you may revoke your proxy prior to the voting thereof. You may revoke your proxy by following the instructions on page 2 of the proxy statement.Granville Tate, Jr.SecretaryChair of the Board 1 Solicitation byInformation About the Board of Directors2023 Annual Meeting 1 1 1 1 2 2 3 3 13 13 13 14 24 24 4 224 Board MissionKey Features of Trustmark’s Corporate Governance 25 35 36 36 36 366 7 7 7 7 8 48 5569 69 7910 10 10 11 11 711 911 912 1312 12 13 Section 16(a) Beneficial Ownership Reporting CompliancePROPOSAL 1: ELECTION OF DIRECTORS14 14 151915 151919 19 20 20 21 21 21 21 22 22 46ProposalDescription Board Recommendation Proposal 1 Election of 11 directors to hold office for the ensuing year or until their successors are elected and qualified APPENDIX A“FOR” A-1Proposal 2Advisory approval of Trustmark’s executive compensation “FOR” Proposal 3 Advisory vote on the frequency of advisory votes on executive compensation “ONE YEAR” B-1Proposal 4Approval of an amendment and restatement of Trustmark’s articles of incorporation to provide for exculpation of directors in accordance with Mississippi law “FOR” Proposal 5 Ratification of selection of Crowe LLP as Trustmark’s independent auditor for the fiscal year ending December 31, 2023 “FOR” · · · · · · · · · · · · · · · · · · · · · ✓ Substantial portion of executive pay based on performance against goals set by the Board ✓ Stock ownership requirements for executive officers ✓ Independent compensation consultant regularly advises the Human Resources Committee ✓ Minimum vesting periods of not less than three years for equity awards, with three-year cliff vesting of time-based awards ✓ Clawback provisions that permit Trustmark to recover incentive-based compensation under certain circumstances ✓ Use of peer company data to help set executive compensation ✓ Annual advisory votes on executive compensation ✓ Oversight of compensation by Human Resources Committee, which is comprised solely of independent directors · · · · × × × × × × · · · · · · · Solicitation by the BoardIntroductionDirectors[14], 2016,15, 2023, in connection with the solicitation by the Board of Directors of Trustmark Corporation (Trustmark) of proxies to be voted at the 2016 Annual Meeting of Shareholders (the Annual Meeting) and at any adjournment or postponement thereof for the purposes set forth in the foregoing Notice of Annual Meeting of Shareholders.thereof.shareholders to lower the cost of this solicitation, expedite receipt of this proxy statement by shareholders and help conserve natural resources.for additional informationof Proxy Materials, please see “Availability of Proxy Materials” on page 46.48 for additional information.in the Trustmark Conference Center at the Mississippi Sports Hall of FameTrustmark’s Corporate Office located at 1152 Lakeland Drive,248 East Capitol Street, Jackson, Mississippi 39216,39201 on Tuesday, April 26, 2016,25, 2023, at 2:1:00 p.m. CT. To obtain directions to attend the meeting, contact the Secretary at 1-601-208-5088 or toll-free at 1-800-844-2000 (extension 5088).February 16, 2016,March 1, 2023, are entitled to notice of and to vote at the meeting in person or by proxy.Annual Meeting. On the record date, Trustmark had outstanding [ • ][XX,XXX,XXX] shares of common stock.quorum. The eleven candidates who receivequorum to transact business at the highest number of affirmative votes will be elected as directors. In the election of directors, each shareholder may vote his shares cumulatively by multiplying the number of shares he is entitled to vote by the number of directors to be elected. This product constitutes the number of votes the shareholder may cast for one nominee or distribute among any number of nominees. For all other proposals, eachAnnual Meeting. Each share is entitled to one vote on each proposal. Any suchincluding the advisory vote to approve Trustmark’s executive compensation, ratification of the selection of Crowe Horwath LLP (Crowe Horwath)is as independent auditor and approval of each of the amendments to Trustmark’s articles of incorporation to require majority voting in uncontested director elections and eliminatefollows:cumulative voting in director elections, will be approved if the votes cast in favor of the proposal exceed the votes cast opposing the proposal, if a quorum is present. · · · · · Horwath as independent auditor is considered a routine matter, while the other proposals, i.e., the election of directors, the advisory vote to approve Trustmark’s executive compensation, the advisory vote on the frequency of advisory votes on executive compensation, and approvalthe amendment and restatement of each of the amendments to Trustmark’s articles of incorporation, are considered non-routine matters.theeach director nomineesnominee named in Proposal 1, FOR advisory approval of Trustmark’s executive compensation in Proposal 2, FOR ratificationfor a frequency of every ONE YEAR for the selection of Crowe Horwath as independent auditoradvisory vote on executive compensation in Proposal 3, FOR approval of the amendment toand restatement of Trustmark’s articles of incorporation to require majority voting in uncontested director elections in Proposal 4, FOR approvalratification of the amendment to Trustmark’s articlesselection of incorporation to eliminate cumulative voting in director electionsCrowe as independent auditor in Proposal 5 and on all other matters in accordance with the recommendations of the Board of Directors of Trustmark.Board. in person at the Annual Meeting or by proxy without attending the Annual Meeting. (1) (2) (3) (4) thethis proxy statement, complete the enclosed proxy card and sign, date and return it in the enclosed postage- paidpostage-paid envelope orprovided.(2)Vote by Internet (instructions are on the proxy card or the Notice of Internet Availability).agentother holder of record will provide you with materials and instructions for voting your shares. If you hold your shares through a bank, broker or other holder of record, and you plan to vote in personyour shares at the meeting,Annual Meeting, you should contact yourcomplete the voting instructions form that the bank, broker or agentother holder of record will provide to obtain a legal proxyyou or broker’s proxy card and bring ituse the telephone or Internet voting arrangements described on the voting instructions form or other materials that the bank, broker or other holder of record will provide to the meeting in order to vote in person.you.Revocation of ProxiesRevoking Your ProxyAIf you are a shareholder of record, you may revoke ayour proxy at any time before it isthe shares are voted by proxy during the meeting. A shareholder may revoke a proxy by delivering written notice to the Secretary at or prior to the Annual Meeting or by revocation at the meeting, bytimely delivery to the Secretary of a subsequently dated proxy card or by submitting a later vote by Internet or smartphone (instructions are on the proxy card or the Notice of Internet Availability)Availability or the proxy card). In the case of multiple submissions regarding the same shares, the proxy with the latest date will be counted. The address for the Secretary is c/o Trustmark Corporation, Post Office Box 291, Jackson, MS 39205.should contactby your bank, broker or agent to revoke your proxy or change your vote.other holder of record. of Directors is not aware of any additional matters to be brought before the meeting. If other matters do come before the meeting, the persons named in the accompanying proxy or their substitutes will vote the shares represented by such proxies in accordance with the recommendations of the Board.Directorsits governance structure and processes. As a result of Trustmark.Costsuch review, the Board approved a number of Proxy SolicitationSolicitationstructural and procedural changes in order to enhance the Board’s effectiveness in providing oversight and strategic advice to management. The key structural changes involve a re-organization of proxies will be primarily by mailseveral Board committees and electronic delivery. Associatesa re-allocation of Trustmarkresponsibilities amongst such committees. These changes took effect on January 1, 2023, and its subsidiaries may be used to solicit proxies by meansthe descriptions of telephone or personal contact but will not receive any additional compensation for doing so. Banks, brokers, trustees and nominees will be reimbursed for reasonable expenses incurred in sending proxy materialseach committee’s responsibilities below reflect the re-organized committee structure as of such date. In addition to the beneficial ownerscommittee changes, the Board has implemented a number of such shares. The total cost ofchanges to the solicitation will be borne by Trustmark.of Directors (the Board) to more effectively and efficiently address key, specific issues such as business growth,fivesix standing Board committees and through the effective utilizationuse of the directors’ combined wisdom, and diverse experience and business knowledge.Provisions of Trustmark’s governance structure include, among other things, a mandatory retirement age of 70, a minimum ownership of Trustmark stock, required notification of changes in professional responsibilities and residence, a directors’ attendance policy, as well as the authority to seek advice or counsel from external advisors on an as-needed basis.The role of the Board is to foster Trustmark’s long-term success consistent with its fiduciary responsibilities to shareholders. As part of this role, Trustmark’s Board is responsible for:●The purpose of the Board and its committees is to foster Trustmark’s long-term success consistent with its fiduciary responsibilities to shareholders. As part of this purpose, Trustmark’s Board is responsible for: ●policy-making,●policymaking Ensuring that management’s operations contribute to Trustmark’s financial soundness,● ●● Providing oversight of risks facing Trustmark,●, and ● requirements.requirements· · · · · · · · · · · Board has adopted,Code of Conduct for Trustmark Directors, Code of Ethics for Senior Financial Officers of Trustmark, Code of Ethics and annually reviews, formal charters for the Board and its committeesProcedure to address the governance guidelines and responsibilitiesReport Violations of each. Likewise, the Board has adopted codes of conduct/ ethics for directors, senior financial officers (including the CEO) and associates. These materialsLaw or Accounting or Audit Irregularities (Whistleblower Procedures) are available on Trustmark’s website at www.trustmark.cominvestorrelations.trustmark.com or may be obtained, without charge, by written request addressed to the Secretary, of the Board, Trustmark Corporation, Post Office Box 291, Jackson, MS 39205.principalchief executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, on www.trustmark.com underInvestor Relations/Corporate Governanceat investorrelations.trustmark.com promptly following any such amendment or waiver. Trustmark may also elect to disclose any such amendment or waiver in a report onForm 8-K filed with either in addition to or in lieu of the website disclosure.. The information contained on or connected to Trustmark’s website is not incorporated by reference in this proxy statement and should not be considered part of this or any other document that Trustmark files with the SEC.four10 times in 2015.2022. Each director attended at least 75%90% of the total number of meetings of the Board and Board committees of which the director was a member in 2015.2022. The Board meets jointly with the Board of Directors of Trustmark National Bank (the Bank Board), and since 2017, all members of the Board have also served as members of the Bank Board.shareholders, and in 2015, all of the directors and nominees were present.shareholders.affirmatively determined that the following current directors and director nominees are “independent directors” (within the meaning of Rule 5605(a)(2) of the NASDAQNasdaq Listing Rules): John M. McCullouch Toni D. Cooley Daniel A. Grafton R. Michael Summerford David H. Hoster II LeRoy G. Walker,David H. Hoster II has reachedThe Board also determined in 2022 that former Director Toni D. Cooley, who retired from the mandatory retirement age and will, therefore, not stand for re-election at the Annual Meeting.Board in April 2022, was an “independent director.”relationships,wealth management and trust services division of the Bank. The Board also noted that a number of directors, including through business affiliates, that Messrs. Grafton, Hoster and Puckett, Mrs. Conerly and Ms. Cooley have as customers of Trustmark National Bank’s (the Bank) subsidiary, Fisher Brown Bottrell Insurance, Inc., and that Mrs. Conerly’s employer has as a service-provider tocustomer relationships with the Bank and in the form of routine deposit, credit card and/or loan products in the ordinary course. In each case, the Board concluded that the business relationship did not interfere with the individual’s ability to exercise independent judgment as a director of Trustmark.ChairmanChair and CEO to be separate or combined.SinceMr. Dewey succeeded Mr. Host as CEO of Trustmark and the Bank on January 1, 2011,2021, at which time Mr. Host became Executive Chairman of Trustmark has operated under aand the Bank. In his role as Executive Chairman, Mr. Host focused on issues involving board leadership structure with separate roles for Boardgovernance, corporate strategy, corporate development, investor relations, industry engagement and civic leadership. Following the 2022 annual meeting of shareholders, Mr. Host ceased serving as Executive Chairman, and CEObecame Board Chair.since May 10, 2011, Trustmark has had an independent Board Chairman.The Board believes its current leadership structure is the most efficient and effective leadership structure for Trustmark at this time. The current leadership structure allows the CEO to focus on providing day-to-day leadership and management of the company, while, as an independent Board Chairman, Daniel A. Grafton, who has a broad business background and has developed extensive managerial and leadership skills through his business career, canBylaws provide guidance to the CEO, set the agenda for Board meetings (in consultation with the CEO and other members of the Board), preside over meetings ofthat if the Board serve as the primary communicator between the directors and the CEO and perform other administrative functions relating to the Board’s activities. This separation of the roles also fosters greater independence between the Board and management.The Board believes that maintaining separate Board ChairmanChair and CEO positions permits Mr. Host to focus on managing Trustmark’s business operations in his role as CEO while Mr. Grafton, as Board Chairman, maintains responsibility for leadingare occupied by the same individual or if the Board in its oversight function and consideration of broader corporate strategy. The Board believes that this leadership structure providesChair is otherwise not independent, the appropriate balance between strategic development andBoard’s Lead Director, who is independent, oversight of management.In the future, if the CEO were to alsoshall serve as Board Chairman, the governance guidelines contained in Trustmark’s Board Charter provide that the independent chairmanChair of the Executive Committee would serveand Nominating & Governance Committee. Mr. Host is not considered to be independent due to his prior tenures as CEO and Executive Chairman. Mr. Puckett has served as the Board’sChair of the Executive Committee, Nominating Committee, and as of 2023, the Nominating & Governance Committee, and Lead Director with primary responsibility forsince the 2020 annual meeting of shareholders. The Lead Director’s responsibilities include (i) chairing meetings and executive sessions of the non-management directors. The Lead Director would also be responsibleindependent directors, Executive Committee, Nominating & Governance Committee and meetings on matters for which the Board Chair recuses himself and other meetings in the Board Chair’s absence, (ii) coordinating with the Board Chair to develop Board meeting agendas and schedules, (iii) communicating with and advising the Board Chair, (iv) referring to the appropriate Board committee any issue brought to his attention by shareholders, directors or others, and for(v) serving as the primary communicator between the independent directors and the CEO. Mr. Grafton served asCEO and (vi) providing an alternative communication channel for all directors. The Board believes an independent Lead Director serves an important function in providing independent leadership of the Board and strengthening the Board’s Lead Director from May 2010 until May 2011 when he became the independent Chairmanoversight of the Board.Trustmark’s business. The Board Charter is posted at investorrelations.trustmark.com.ThereAs of January 1, 2023, there are fivesix standing committees that collectively provide guidance on strategic issues, planning and policymaking:Board committees: Audit, and Finance, Enterprise Risk, Executive, Finance, Human Resources and Nominating. Currently,Nominating & Governance. Each of these Board committees are joint committees of the Board and the Bank Board. The Audit, Enterprise Risk, Human Resources and Nominating & Governance committees are comprised solely of independent directors and otherwise satisfy the requirements applicable to such committees under Nasdaq listing standards.exception of the Executive Committee.Audit and Finance CommitteeUnder the terms of its Charter, the Audit and Finance Committee meets at least five times a year and is responsible for, among other things, the appointment, compensation and retention of the independent auditor, oversight of audit activities, financial reporting and regulatory compliance thereof, as well as review and approval of Trustmark’s profit plan. The Committee meets with the independentexternal and internal auditors without management present on a regular basis.present. The Committee’s responsibilities include:· · · ·
· | Considering and reviewing with the Chief Audit Executive and the external auditor the adequacy of Trustmark’s internal controls. |
· | General oversight of the preparation and review of Trustmark’s consolidated financial statements, management’s discussion and analysis, critical accounting policies, interim financial statements, and other matters relating to financial reporting. |
· | Oversight and review of the system for monitoring compliance with laws and regulations. |
The purpose and responsibilities of the Audit and Finance Committee are described in greater detail in its Charter, which is posted on Trustmark’s website at www.trustmark.com underInvestor Relations/Corporate Governance/Audit and Finance Committee Charter.investorrelations.trustmark.com.
Enterprise Risk Committee
The Enterprise Risk Committee which is a joint committee of the Board and the Trustmark National Bank Board (Bank Board), is responsible for monitoringensuring that Trustmark has policies and processes to identify and manage various risks thatthroughout the company. The Committee’s responsibilities include:
· | Reviewing and approving Trustmark’s policies regarding enterprise risk management. |
· | Understanding and analyzing the enterprise-wide effect of the risks Trustmark faces. |
· | Recommending to the Board a formal risk appetite statement for all risk categories. |
· | Reviewing and approving enterprise risk assessments in various risk categories, as prepared by management. |
· | Reviewing Trustmark’s capital stress testing results as they relate to risk. |
· | Reviewing and approving the vendor risk management policy and program. |
· | Reviewing and approving Trustmark’s cybersecurity strategy to protect its information assets and technology platforms. |
· | Monitoring all aspects of the quality of the Bank’s loan portfolio including the risk profile of the portfolio, and reviewing and approving the Bank’s policies regarding loan quality. |
· | Monitoring activities of the Bank’s Wealth Management Group, which includes the fiduciary activities of the Bank’s Trust Department. |
The purpose and responsibilities of the Enterprise Risk Committee are being taken by Trustmark, understanding the enterprise-wide effect of those risks and reporting on such risks to the Board and the Bank Board. The Committee also provides important oversight regarding stress testing and other risk evaluation processes and receives reports from the Board’s and the Bank Board’s other committees about risks that are under the committees’ specific purview.described in greater detail in its Charter, which is posted at investorrelations.trustmark.com.
Executive Committee
The Executive Committee acts on behalf of the Board if a matter requires Board action before a meeting ofbetween regularly scheduled Board meetings. It also evaluates and makes recommendations to the Board can be held. The Committee provides guidance to management on the strategic planning process and issues of strategic importance including business growth and expansion,regarding material corporate transactions, and technology. Additionally,approves unplanned expenditures greater than $1 million if the Finance Committee is unable to meet. The Executive Committee Charter is posted at investorrelations.trustmark.com.
Finance Committee
The Finance Committee is responsible for reviewingoverseeing Trustmark’s budgeting, capital planning and related financial strategy. The Committee’s responsibilities include:
· | Reviewing and recommending for Board approval Trustmark’s annual budget, and monitoring performance against budget. |
· | Providing guidance to management regarding Trustmark’s strategic plan and financial goal setting. |
· | Reviewing and approving unplanned expenditures greater than $1 million. |
· | Reviewing and recommending to the Board actions pertaining to Trustmark’s capital position, including issuance and repurchases of stock and payment of dividends. |
· | Reviewing and approving Trustmark’s capital stress testing policy and results of capital stress testing. |
· | Reviewing and approving the Bank’s funds management policy, and periodically monitoring the Bank’s investment securities portfolio. |
· | Reviewing and approving liquidity risk parameters and guidelines established by management and periodically monitoring the Bank’s liquidity risk profile. |
The purpose and responsibilities of the corporate governance structure and annually evaluating each director’s performance against specific performance criteria. TheFinance Committee are described in greater detail in its Charter, which is also responsible for monitoring progress with Trustmark’s long-term strategic and financial objectives.posted at investorrelations.trustmark.com.
Human Resources Committee
The role of the Human Resources Committee is responsible for overseeing the development of a program to ensurecompensate Trustmark’s management in accordance with Trustmark’s compensation philosophy and objectives. The Committee also ensures that appropriate policies and practices are in place to facilitate the development of associate and management talent and orderly CEO succession planning, corporatesuccession. In fulfilling its role, the Committee’s responsibilities include:
· | Approving management-developed guidelines that shape Trustmark’s compensation strategy and approach. |
· | Recommending the CEO’s compensation and performance evaluation procedures, for approval by the Board. |
· | Recommending the CEO succession planning process, subject to approval by the Board. |
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· | Recommending, for approval by the Bank Board and the Board, as applicable, the appointment or promotion of officers who are members (or proposed members) of the Executive Strategy Committee. |
· | Recommending compensation for officers who are members of the Executive Strategy Committee, for approval by the Bank Board and the Board, as applicable. |
· | Recommending awards under Trustmark’s equity compensation plans, for approval by the Board, subject to limited discretion by the CEO for specified awards. |
· | Recommending compensation for directors, for approval by the Board. |
· | Reviewing and approving Trustmark’s compensation disclosures. |
· | Reviewing and approving Trustmark’s compensation policies and practices as they relate to risk management. |
· | Reviewing and recommending for the Board’s approval Trustmark’s policies and practices regarding human resources-related social responsibility issues, including equal opportunity employment, diversity and inclusion. |
All members of the Committee during 2022 were and currently are “non-employee directors” within the settingmeaning of management compensation.
Rule 16b-3 under the Securities Exchange Act of 1934 (the Exchange Act), “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, and “independent directors” within the meaning of Rule 5605(a)(2) of the Nasdaq listing rules. The purpose and responsibilities of the Human Resources Committee are described in greater detail in its Charter, which is posted on Trustmark’s website at www.trustmark.com underInvestor Relations/Corporate Governance/Human Resourcesinvestorrelations.trustmark.com.
Nominating & Governance Committee Charter.
Nominating Committee
The purpose of the Nominating & Governance Committee is charged withto assist the responsibility of seeking, interviewing andBoard in recommending qualified individuals for election or re-election to the Board qualified candidatesand for assignment to Board committees, and to provide guidance on Board and committee membership.corporate governance issues. The Committee also evaluates the annual performance of the Board and its committees. In fulfilling its role, the Committee’s responsibilities include:
· | Reviewing and recommending for approval by the Board Trustmark’s corporate governance structure and practices to ensure sound, effective and efficient operation of the Board. |
· | Seeking, interviewing, and recommending qualified individuals for Board service. |
· | Identifying and recommending qualified individuals for membership on committees of the Board. |
· | Reviewing and approving appropriate support for director onboarding and training. |
· | Reviewing and recommending for Board approval director performance standards, and evaluating, annually, each director’s performance against such performance standards. |
The purpose and responsibilities of the Nominating & Governance Committee are described in greater detail in its Charter, which is posted on Trustmark’s website at www.trustmark.com underInvestor Relations/Corporate Governance/Nominating Committee Charter.investorrelations.trustmark.com.
Board Oversight of Risk Management
Trustmark believes that its governance and leadership structures allow the Board to provide effective risk oversight. In addition to the reports from the Enterprise Risk Committee, Trustmark’s directors receive and discuss regular reports prepared by Trustmark’s senior management, including the CFO, Chief FinancialCredit and Operations Officer, Chief Administrative Officer, Chief Risk Officer and the Chief Risk Officer.Audit Executive. Through these reports, Trustmark’s directors receive information on areas of material riskrisks to the company, including credit, liquidity, market/interest rate, compliance, operational, technology, strategic, financial and reputational risks, and theserisks. These reports enable Trustmark’s directors to understand the risk identification, risk management and risk mitigation strategies employed by Trustmark’s management and the Enterprise Risk Committee.
The Board and the Enterprise Risk Committee will request supplemental reports from Trustmark’s management with regard to risk management and risk mitigation strategies as appropriate. This reporting and governance structure ensures that information from the Enterprise Risk Committee, the other committees of the Board and the Bank Board, and management is analyzed and reported to the Board, and enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.
The Board Charter is posted on Trustmark’s websiteprovides oversight of management’s efforts to address cybersecurity risk by receiving periodic reports at www.trustmark.com underInvestor Relations/Corporate Governance/meetings of the Enterprise Risk Committee and Audit Committee, as well as presentations at the Board Charter.level. These reports to the Board and its Committees address the threat environment, vulnerability assessments, specific cyber incidents and management’s efforts to monitor, detect and prevent cyber threats.
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The following table shows, for 2022, the current membership of each committee and the number of meetings held by each committee during 2015:the year:
Director | Audit and Finance | Enterprise Risk | Executive | Human Resources | Nominating | |||||
| ||||||||||
Adolphus B. Baker | X | X | ||||||||
Tracy T. Conerly(1) | X | |||||||||
Toni D. Cooley(2) | Chairman | X | ||||||||
Daniel A. Grafton | Chairman | X | X | |||||||
Gerard R. Host | X | |||||||||
David H. Hoster II | X | X | X | X | ||||||
John M. McCullouch | X | X | Chairman | Chairman | ||||||
Richard H. Puckett | X | X | X | |||||||
R. Michael Summerford | Chairman | X | X | X | ||||||
LeRoy G. Walker, Jr. | X | |||||||||
William G. Yates III | ||||||||||
| ||||||||||
2015 Meetings | 8 | 6 | 3 | 4 | 1 |
Director | Audit & Finance | Enterprise Risk | Executive | Human Resources | Nominating | |||||
Adolphus B. Baker | X | Chair | X | |||||||
William A. Brown | X | X | X | X | ||||||
Augustus L. Collins | X | X | ||||||||
Tracy T. Conerly | Chair | X | X | |||||||
Toni D. Cooley (1) | X | |||||||||
Duane A. Dewey | X | |||||||||
Marcelo Eduardo | X | X | X | |||||||
J. Clay Hays Jr., M.D. | Chair | X | X | X | ||||||
Gerard R. Host | X | |||||||||
Harris V. Morrissette | X | X | ||||||||
Richard H. Puckett | Chair/Lead Director | X | Chair | |||||||
William G. Yates III | ||||||||||
2022 Meetings | 7 | 4 | 6 | 5 | 2 |
(1) | Ms. Cooley retired from the |
Non-employee director compensation is determined by the BoardAs of Directors, based on the recommendation of the Human Resources Committee, which periodically reviews non-employee director compensation to determine if changes are needed. The last periodic review was performed in 2013. Associates of Trustmark who also serve as directors receive no compensation for Board or committee service.
Since January 2014, non-employee directors receive an annual retainer of $13,000 for service on the Trustmark Board, an annual retainer of $12,000 for their service as a Bank Board director, as well as $1,500 for each Trustmark Board meeting attended. The Chairman of the Audit and Finance Committee receives an additional annual retainer of $12,000, the Chairman of the Human Resources Committee receives an additional annual retainer of $10,000, the Chairman of the Nominating Committee receives an additional annual retainer of $2,000 and the independent Chairman of the Board receives an additional annual retainer of $36,000. All Board committee chairmen and committee members receive $1,000 for each committee meeting attended (including ad hoc committees). In addition, each director who serves as chairman of a committee of the Bank Board receives an additional annual retainer of $2,000. All Bank Board committee chairmen and committee members receive $750 for each committee meeting attended. For meetings wherein the director attends via teleconference, the director receives one-half of the meeting fee. In addition, directors who serve as advisory directors on Trustmark’s Community Bank Advisory Boards of Directors receive a fee of $250 for each Advisory Board meeting attended, except for the Florida Community Bank Advisory Board of Directors, which receives a fee of $1,000 for each Advisory Board meeting attended and meets quarterly. Annual retainer and meeting fees are paid monthly. Directors are also eligible to be reimbursed for expenses incurred in attending Board and committee meetings. Trustmark maintains a Directors’ Deferred Fee Plan for non-employee directors who became directors prior to 2003 and who elected to participate in the plan. Under the plan, participating directors had to defer $12,000 of fees annually to fund a portion of the cost of their defined retirement benefits and death benefits. The amount of the retirement benefit and death benefit has been determined based upon the participant’s annual contribution amount, the length of Board service and the age of the director at date of entry into the plan. In order to control costs, and based on peer company and broader market data provided by the Human Resources Committee’s compensation consultant, Pearl Meyer & Partners (PM&P), that comparable organizations were not providing this benefit to directors, the Board amended the plan on April 28, 2009, to cease future benefit accruals under and contributions by directors to the plan effective March 1, 2010. The plan requires retirement benefits to commence at a director’s normal retirement date (March 1 following age 65). Thus, should a director continue service beyond normal retirement date, retirement benefits would begin prior to cessation of Board service. Depending on a number of factors, the vested annual benefit at retirement is payable for the longer of life or twenty-five years and, as of December 31, 2015, ranges from $51,000 to $78,000 (taking into account the March 1, 2010 benefit accrual freeze) for current directors who elected to participate in the plan. If a participating director dies prior to normal retirement, his beneficiary will receive a scheduled death benefit for ten years. Trustmark has purchased life insurance contracts on participating directors to fund the benefits under this plan.
Non-employee directors are eligible to receive equity compensation awards under the Trustmark Corporation Amended and Restated Stock and Incentive Compensation Plan (the Amended and Restated Stock Plan). Consistent with an October 2013 determination that the annual awards of time-based restricted stock for the non-employee directors should be valued at approximately $42,500, on January 27, 2015, each non-employee director received 1,880 shares of time-based restricted stock, valued on a 10-day average closing stock price up to and including the date of the grant. Subject to accelerated vesting
in full upon a change in control, upon retirement at or after age 65 or cessation of Board service at the end of an elected term, in each case with consent of the Human Resources Committee and where cause for termination is not present, or upon disability, death or termination without cause, the restricted shares vest on January 27, 2018, if the director is still serving at the time.
In addition to the $1,000 minimum ownership required to become a director (as discussed under Director Qualifications), the Board imposes a director stock ownership requirement that requires all directors to own a minimum number of shares of Trustmark stock. This minimum number was increased from 3,000 shares to 6,000 shares effective January 1, 2014. All of2023, the current directors other than Mrs. Conerly already meet the new minimum ownership requirement. Mrs. ConerlyCommittee structure and any new director will have up to five years from the date Board service begins to meet the ownership requirement. Until a director has reached the minimum requirement, the directormembership is required to hold 100% of the shares received from any Trustmark stock awards.as follows:
To ensure that directors bear the full risks of stock ownership, Trustmark’s insider trading policy prohibits directors, among others, from engaging in options trading, short sales or hedging transactions relating to Trustmark stock. With limited exceptions, directors are also prohibited from pledging or creating a security interest in any Trustmark stock they hold.
Non-employee directors may defer all or a part of their annual retainer and meeting fees pursuant to Trustmark’s Non-Qualified Deferred Compensation (NQDC) Plan. The compensation deferred is credited to an account, which is deemed invested in and mirrors the performance of one or more designated investment funds available under the plan and selected at the option of the director. The deferred compensation account will be paid in a lump sum or in annual installments at a designated time upon the occurrence of an unforeseen emergency or upon a director’s retirement or cessation of service on the Board.
Director Compensation for 2015
The following table provides director compensation information for the year ended December 31, 2015:
Name(1) | Fees Earned Cash(2) ($) | Stock ($) | Option Awards (4) ($) | Non-Equity ($) | Change in ($) | All Other ($) | Total ($) | ||||||||||||||||||||||||||||
Adolphus B. Baker | $ | 44,000 | $ | 42,695 | --- | --- | --- | $ | 4,586 | $ | 91,281 | ||||||||||||||||||||||||
Tracy T. Conerly | $ | 36,667 | $ | 19,508 | --- | --- | --- | $ | 1,471 | $ | 57,646 | ||||||||||||||||||||||||
Toni D. Cooley | $ | 42,333 | $ | 42,695 | --- | --- | --- | $ | 3,978 | $ | 89,006 | ||||||||||||||||||||||||
Daniel A. Grafton | $ | 75,000 | $ | 42,695 | --- | --- | --- | $ | 4,586 | $ | 122,281 | ||||||||||||||||||||||||
David H. Hoster II | $ | 47,667 | $ | 42,695 | --- | --- | --- | $ | 4,586 | $ | 94,948 | ||||||||||||||||||||||||
John M. McCullouch | $ | 57,000 | $ | 42,695 | --- | --- | --- | $ | 4,586 | $ | 104,281 | ||||||||||||||||||||||||
Richard H. Puckett | $ | 48,375 | $ | 42,695 | --- | --- | --- | $ | 4,586 | $ | 95,656 | ||||||||||||||||||||||||
R. Michael Summerford | $ | 59,000 | $ | 42,695 | --- | --- | --- | $ | 4,586 | $ | 106,281 | ||||||||||||||||||||||||
LeRoy G. Walker, Jr. | $ | 43,125 | $ | 42,695 | --- | --- | --- | $ | 4,586 | $ | 90,406 | ||||||||||||||||||||||||
William G. Yates III | $ | 34,500 | $ | 42,695 | --- | --- | --- | $ | 4,586 | $ | 81,781 |
Director | Audit | Enterprise Risk | Executive | Finance | Human Resources | Nominating & Governance | ||||||
Adolphus B. Baker | Chair | X | ||||||||||
William A. Brown | X | X | ||||||||||
Augustus L. Collins | X | X | X | |||||||||
Tracy T. Conerly | Chair | X | X | |||||||||
Duane A. Dewey | X | |||||||||||
Marcelo Eduardo | X | X | Chair | X | ||||||||
J. Clay Hays, Jr., M.D. | Chair | X | X | |||||||||
Gerard R. Host |
Harris V. Morrissette | X | X | X | |||||||||
Richard H. Puckett | Chair/Lead Director | X | Chair/Lead Director | |||||||||
William G. Yates III | X |
Shareholders desiring to contact Trustmark’s Board may do so by sending written correspondence to Board of Directors, Trustmark Corporation, Post Office Box 291, Jackson, MS 39205 or by email addressed to boardofdirectors@trustmark.com.
Communications will be referred to the Chair of the Executive Committee, Chairman, who will determine the appropriate committee to receive the communication and take any action deemed necessary by that committee.
Pursuant to Trustmark’s Whistleblower Policy,Procedures, any violations of law or complaints relating to Trustmark’sor concerns regarding accounting internal accounting controls or auditing matters should be directedreported to the Trustmark Hotline(i) Trustmark’s independent online reporting center at 1-866-979-3769.www.trustmark.ethicspoint.com, (ii) Trustmark’s independent hotline at 1-866-979-3769, or (iii) Trustmark’s Ethics Committee Chair at 601-208-6867. Complaints will be investigated by Trustmark’s General CounselChief Administrative Officer and Chief Audit Executive and reported to the Audit and Finance Committee.
Nominations for election to the Board may be made by or on behalf of the Board or by any shareholder of any outstanding class of capital stock of Trustmark entitled to vote forin the election of directors at an annual meeting.
Nominations other than those made by or on behalf of the existing Board of Trustmark shallmust be made in accordance with procedures set forth in Trustmark’s bylaws. These procedures require that such nominations be in writing and shallthat they be delivered or mailed to Trustmark’s ChairmanChair of the Board and received (a) not less than sixty60 days nor more than ninety90 days prior to the first anniversary of the mailing date of Trustmark’s proxy statement in connection with the last annual meeting of shareholders, or (b) if no annual meeting was held in the prior year or the date of the annual meeting has been changed by more than thirty30 days from the date of the prior year’s annual meeting, not less than ninety90 days before the date of the annual meeting. SuchThe bylaws also require that such notification shall contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed nominee, (b) the principal occupation of each proposed nominee, (c) the total number of shares of capital stock of Trustmark that will be voted for each proposed nominee, (d) the name and residence address of the notifying shareholder, (e) the number of shares of capital stock of Trustmark owned by the notifying shareholder, (f) such other information regarding such proposed nominee as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had the proposed nominee been nominated by the Board, (g) a representation that the notifying shareholder is the owner of shares entitled
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to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the proposed nominee, and (h) the written consent of each proposed nominee to serve as a director of Trustmark if so elected.elected and (i) a representation as to whether the notifying shareholder intends or is part of a group which intends to solicit proxies or votes in support of such director nominees in accordance with Rule 14a-19 under the Exchange Act. In addition, such notification must include the information required by Rule 14a-19(b) under the Exchange Act if the notifying shareholder intends to solicit proxies or votes in support of director nominees in accordance with Rule 14a-19 under the Exchange Act.
Nominations not made in accordance with the above procedurebylaw procedures may be disregarded by the ChairmanChair of the Board of the annual meeting at his discretion, and upon his instruction, all votes cast for each such nominee may be disregarded.
Trustmark’s bylaws permit direct nominations by shareholders. Therefore, the Nominating & Governance Committee does not have a policy for considering nominations by shareholders other than through the bylaw process outlined above. However, if a shareholder wishes to recommend an individual for Board service, rather than directly nominate the individual as set forth above, the shareholder may submit the individual’s name to the Nominating & Governance Committee by email to boardofdirectors@trustmark.com, or in writing addressed to Trustmark Corporation Nominating & Governance Committee, Post Office Box 291, Jackson, MS 39205 or by email to boardofdirectors@trustmark.com.39205. In order to give the Nominating & Governance Committee adequate time to consider any such individual for nomination as a director at the 20172024 Annual Meeting of Shareholders, such recommendations should be delivered no later than October 1, 2016.2023. In considering an individual recommended by a shareholder but not directly nominated, the Nominating & Governance Committee will use the same guidelines as set forth in the Director Qualifications section below.
When identifying potential candidates for director nominees, the Nominating & Governance Committee may solicit suggestions from incumbent directors, management or others. With regard
Environmental, Social and Governance/Corporate Social Responsibility (ESG/CSR)
Trustmark believes that a company’s commitment to corporate social responsibility is measured by its sustainability, environmental, and societal impact. These factors are critical to long-term business viability. Trustmark understands that a company’s performance must be measured not only by shareholder returns, but also by how it achieves ESG/CSR objectives. The company employs a Director of Corporate Social Responsibility to monitor the proposed nomineescontinuing effectiveness of its program. Robust community engagement, informed policies and procedures, and responsible philanthropy are some of the ways in which Trustmark continues to serve its communities and workforce. Accomplishments in these areas of focus were highlighted in Trustmark’s first annual CSR Impact Report, published in 2022 and available at Trustmark.com.
Board Oversight.The Board has responsibility for 2016, all nomineesoverseeing Trustmark’s strategies, policies, and programs relating to ESG/CSR matters, including environmental sustainability, community development and reinvestment, and charitable giving and other programs with social impacts. As described above, the Human Resources Committee reviews and approves Trustmark’s policies and practices regarding social responsibility issues relating to human resources, such as equal opportunity employment, diversity and inclusion.
CSR Engagement and Investment.Trustmark’s continued commitment to corporate social responsibility was demonstrated in 2022 through services provided to customers, partnerships formed in communities, and opportunities presented to associates. The company’s strategically aligned activities reflect its core values of Integrity, Service, Accountability, Relationships and Solutions. In 2022, Trustmark invested more than $4 million in the form of contributions and sponsorships to local organizations, including a $1.5 million tax credit investment allocated to 13 Mississippi youth and family-based charities providing services and programs for the welfare and development of children as part of Trustmark’s commitment under the Mississippi Children’s Promise Act.
Trustmark continued to focus on financial literacy and community outreach in 2022, with associates volunteering more than 6,519 hours of service to local partners through positions on non-profit boards of directors, financial literacy outreach and other forms of community engagement. The company also continued to partner with EVERFI, Inc., to provide online financial literacy courses in schools throughout Mississippi to educate students on financial matters through Trustmark’s Financial Scholars Program. The EVERFI Engage platform was also made available to Trustmark associates to conduct community-based financial literacy sessions, both in-person and virtually.
Additional financial literacy support was provided through Trustmark’s continued partnership with Operation HOPE, Inc., a national non-profit organization. Trustmark continued to engage with the organization in 2022 to implement the HOPE Inside program within the markets of Memphis, Tennessee; Montgomery, Alabama; and Jackson, Mississippi to provide banking customers and members of the public with opportunities to receive financial tools and education to strengthen their financial security. Trustmark’s investment of $200,000 in each of these markets provides a two-year commitment to support a dedicated financial wellness coach to administer the HOPE Inside program. The coaches conduct financial literacy seminars, individualized financial counseling sessions and provide referrals to disaster relief services. These services and resources are current Board members, exceptprovided at no cost to community residents, and extend to city employees and first responders in each of the designated markets. In 2022, more than 3,320 services were provided through Trustmark’s partnership with Operation HOPE.
Trustmark values partnerships that serve diverse communities, and it embraces opportunities to engage in that work. In 2022, Trustmark participated in collaborative partnerships with two minority depository institutions (MDIs), through the Project Roundtable for Mr. Morrissette, who was recommendedEconomic Access and Change (REACh) Initiative, developed by the CEOOCC. Project REACh aims to identify and reduce barriers to full, fair participation in the nation’s banking system and the Chairmaneconomy to help expand access to credit and capital.
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Trustmark announced its partnership under the program with newly formed Agility Bank in early 2022. Agility Bank, based in Houston, Texas, is the first primarily women-owned and led bank in the United States under the MDI national charter of the Board.OCC. Trustmark entered a second year of collaboration in 2022 with Commonwealth National Bank, which has served the Mobile, Alabama banking community since 1976. Commonwealth National Bank is one of fewer than 25 black-owned banks remaining in the United States.
Trustmark’s commitment to building and supporting resilient communities also includes revitalizing and strengthening underserved communities. In 2022, its investments in low-to-moderate income areas included more than $347 million in home mortgage loans, $542 million in small business loans and small farm loans and more than $172 million in community development loans. Also in 2022, Trustmark provided low-to-moderate income borrowers more than $510 million in home mortgage loans. The company’s collaborative work with community service providers, developers, realtors, housing advocates and others resulted in more than $34.5 million in investments that provide affordable housing, employment and community services for those with low-to-moderate incomes. Trustmark also enhanced its mortgage product offerings during the year to meet the special credit needs of low-to-moderate income individuals and communities. Trustmark employs a dedicated team of associates to provide oversight of initiatives that advance financial growth and stability within racially and economically diverse communities. The Diverse Market Strategy Team coordinates with business units at Trustmark to develop innovative lending strategies, inclusive outreach events, targeted marketing campaigns, and special purpose products and programs to meet the unique needs of diverse communities throughout the company’s footprint.
Human Capital and Workforce Diversity.Trustmark’s commitment to serve diverse communities extends to its workforce practices. Trustmark’s Diversity Officer works within the Human Resources Department to develop and oversee diverse training, recruitment and retention practices. The company has introduced several initiatives to support a workforce culture of diversity through educational diversity training for management and all associates, including the development of a training course that emphasizes management’s role in hiring a diverse and inclusive workforce. Three HR associates hold a Diversity, Equity and Inclusion certificate from the University of South Florida’s Muma College of Business and, in 2022, represented Trustmark in the American Bankers Association’s Black Bankers Employee Resource Group. Trustmark also continues to socialize cultural observances through a community calendar of events to promote a culture of inclusivity and engagement among associates. Additionally, in 2022, Trustmark launched its second cycle of the Emerging Talent Program, designed to identify and develop high-performing associates through management mentorship.
Environmental Sustainability.Throughout the year, Trustmark promoted environmental sustainability through business practices that conserve natural resources, including the sponsorship of numerous community shredding events to encourage recycling initiatives. Trustmark also provides shredding services at all buildings and branch locations, offers enhanced digital banking options and processes for customers, and utilizes internal workflow management systems to reduce paper usage. Additionally, an LED light conversion project was continued across the organization in 2022 to increase energy efficiency, in which 15 additional Trustmark buildings were retrofitted with LED lighting. Programmable thermostats and HVAC control systems installed last year in Trustmark buildings to conserve and monitor energy use resulted in usage declines between 25-40 percent. Trustmark’s proactive environmental business practices were matched with its responsiveness to weather-induced events in 2022 through the activation of comprehensive disaster recovery and business continuity plans. The plans detail the responsibilities of key positions, instructions on ways to continue operations throughout the progression of weather-related events, and timeframes by which key tasks must be accomplished. Trustmark is committed to assessing environmental risks to its operations, including those associated with increasing climate change concerns.
Director Qualifications
The Board believes that in order to appropriately carry out its roles, directors must demonstrate a variety of personal traits, leadership qualities and individual competencies. In considering nominees submitted by the Board or management and any recommendations submitted by shareholders, the Nominating & Governance Committee will use these personal traits, leadership qualities and individual competencies to assess future director nominees’ suitability for Board service. The Nominating & Governance Committee also evaluates each director nominee’s qualities in the context of how that nominee would relate to the Board as a whole, in light of the Board’s current composition and Trustmark’s evolving needs.
Although Trustmark has no formal policy regarding diversity, the Nominating & Governance Committee believes that the Board should include directors with diverse skills, experience and business knowledge, and whose backgrounds, ages, geographical representation and community involvement contribute to an overall diversity of perspective that enhances the quality of the Board’s deliberations and decisions. The Nominating & Governance Committee may consider these factors as it deems appropriate in connection with the general qualifications of each director nominee. To be eligible to serve on the Board, each director is required to own in his or her own right, common or preferred stock of Trustmark having an aggregate par, fair market or equity value of not less than $1,000 as of the most recent of (i) the date of purchase, (ii) the date the person became a director, or (iii) the date of the director’s most recent election to the Board. In addition, each director must own a minimum of 6,000 shares of Trustmark stock within five years of joining the Board. Upon attaining the age of 70, a director is required to retire from the Board effective upon completion of his or her then current term of office.
Personal Traits
Board service is an extremely important, high profilehigh-profile role and carries with it significant responsibility. For that reason, it is important that all directors possess a certain set of personal traits, including:
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· Initiative/Responsiveness | |||||
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Leadership Qualities
For individuals considered for Board leadership roles, the following skill sets are required:
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Individual Competencies
There are certain competencies that must be represented collectively by the directors on each Board committee, but each individual director need not necessarily possess all of them. The specific competencies vary by committee, as illustrated in the chart below:
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Individual Director Competencies | Audit | Enterprise Risk | Executive | Finance | Human Resources | Nominating & Governance | |||||||||
1. Financial Acumen | |||||||||||||||
Accounting and finance knowledge | ✓ | ✓ | ✓ | ✓ | |||||||||||
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Financial statement analysis | ✓ | ||||||||||||||
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Ability to communicate financial concepts in lay terms | ✓ | ||||||||||||||
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Knowledge of capital markets | ✓ | ✓ | ✓ | ||||||||||||
Financial planning | ✓ | ✓ | ✓ | ||||||||||||
2. Organizational Effectiveness | |||||||||||||||
Talent management | ✓ | ✓ | |||||||||||||
Understanding of compensation issues | ✓ | ✓ | |||||||||||||
Ability to discern candidate qualifications | ✓ | ||||||||||||||
3. Strategic Direction | |||||||||||||||
Vision | ✓ | ✓ | |||||||||||||
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Strategic perspective | ✓ | ||||||||||||||
Technology knowledge | ✓ | ||||||||||||||
Industry knowledge | ✓ | ✓ | |||||||||||||
4. Risk Management Experience | |||||||||||||||
Experience managing risk exposures | ✓ | ✓ |
Specific Director Experience, Qualifications, Attributes and Skills
The Nominating Committee assists the Board by identifying individuals qualified to serve as Board members and by recommending to the Board the director nominees for election at the next annual meeting of shareholders. The Board believes that each director nomineeperson nominated for election at the Annual Meeting possesses the personal traits described above and that each director nominee forwho has served in a position of Board leadership also demonstrates the additional leadership qualities described above. In considering the director nominees’ individual competencies, the Board believes that the appropriate competencies are represented for the Board as a whole and for each of the Board’s committees. In addition, each nominee possesses characteristics that led the Board to conclude that such person should serve as a director. The specific experience, qualifications, attributes and skills that the Board believes each nominee possesses are discussed under Proposal 1 in the table entitled “The Nominees,” beginning on page 9.
Board Diversity
The chart below provides information regarding the diversity characteristics of the members our Board, based on self-identification by the directors.
Board Diversity Matrix (As of December 31, 2022) | ||||||||
Total Number of Directors | 11 | |||||||
Female | Male | Non-Binary | Did Not Disclose Gender | |||||
Part I: Gender Identity | ||||||||
Directors | 1 | 10 | - | - | ||||
Part II: Demographic Background | ||||||||
African American or Black | - | 1 | - | - | ||||
Alaskan Native or Native American | - | - | - | - | ||||
Asian | - | - | - | - | ||||
Hispanic or Latinx | - | 1 | - | - | ||||
Native Hawaiian or Pacific Islander | - | - | - | - | ||||
White | 1 | 8 | - | - | ||||
Two or More Races or Ethnicities | - | - | - | - | ||||
LGBTQ+ | - | |||||||
Did Not Disclose Demographic Background | - |
13
PROPOSAL 1: ELECTION OF DIRECTORS
The Board has fixed the number of directors for the coming year at eleven. David H. Hoster II, a current director who has served on the Board since 2008, has reached the Board’s mandatory retirement age and is not eligible to stand for re-election to the Board at the Annual Meeting. Mr. Hoster’s service as a director will end at the Annual Meeting. 11.
The nominees listed herein have been proposed by the Board for election at the meeting.Annual Meeting. Shares represented by valid proxies will, unless authority to vote is withheld, be voted in favor of the proposed slate of eleven11 nominees. InDirectors must receive a majority of the election of directors, each shareholder may vote his shares cumulatively by multiplyingvotes cast in order to be elected (that is, the number of shares he is entitled to vote byvoted “for” a director must exceed the number of directors to be elected. This product constitutes the number of votes the shareholder may cast for one nominee or distribute among any number of nominees. The proxies reserve the right, in their discretion, to vote cumulatively.shares voted “against” that director). If a shareholder withholds authority for onenominee who is an incumbent director is not elected to the Board, and no successor is elected, such nominee must tender his or more nominees and does not direct otherwise,her resignation to the total number of votesBoard. The Nominating & Governance Committee will then make a recommendation to the shareholder is entitled to cast will be distributed among the remaining nominees.
Should any of these nominees be unableBoard on whether to accept or reject the nomination,resignation or whether to take other action. The director who tenders his or her resignation may not participate in the votes which otherwise would have been cast forrecommendation of the nominee(s) will be voted for such other person(s) asNominating & Governance Committee or the decision of the Board shall nominate.with respect to his or her resignation. Each director is elected to hold office until the next annual meeting of shareholders or until a successor is elected and qualified. The persons who will be elected to the Board will be the eleven nominees receiving the highest number of votes.
The Board recommends that shareholders vote “for”“FOR” the proposed nominees.
Adolphus B. Baker, Director of Trustmark since 2007 (Independent Director)
Trustmark Corporation Committees:
· Nominating & Governance |
Career Highlights:
Foods, Inc.
Other
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Experience and qualifications:Mr. Baker’s position as presidentBaker is chairman and former chief executive officer and chairman of anothera publicly-traded company that is the largest producer and distributor of shell eggs in the United States. His position has provided him with significant business leadership skills and experience in evaluating strategic alternatives that focus on maximizing shareholder value. Mr. Baker’s years of service as a director for Trustmark Nationalof the Bank, and particularly as the former chair of the Bank Board’s Asset Asset/Liability Committee Chairman,(the responsibilities of which are now performed by the Finance Committee), provide him with an intrinsic understanding of Trustmark’s strategy for managing liquidity, which is a skill essential to the Board’s risk oversight function. He is a member of the National Association of Corporate Directors.
William A. Brown, 65 Director of Trustmark since 2017 (Independent Director) Trustmark Corporation Committees: · Audit · Enterprise Risk | Career Highlights: · Chairman, Brown Group Holdings, Inc. (Soft Drink Manufacturing) · President, Brown Bottling Group, Inc. (Beverage Distributor) |
Experience and qualifications: Mr. Brown serves as chairman of a soft drink manufacturing business and president of a regional beverage distributor based in Mississippi. He serves on the Boards of the Pepsi Cola Bottlers Association and Wis-Pak/WP Beverages as well as trade associations, including the Mississippi Beverage Association. His extensive experience in this industry has provided him with significant marketing and business leadership skills as well as in-depth understanding of the business climate and customer base in significant Trustmark markets. Mr. Brown also served as Chair of the Bank Board’s Credit Policy Committee (the responsibilities of which are now performed by the Enterprise Risk Committee), providing him with an understanding of Trustmark’s credit culture and philosophy, which is a skill essential to the Board’s risk oversight function. He is a member of the National Association of Corporate Directors.
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Augustus L. Collins, 65 Director of Trustmark since 2020 (Independent Director) Trustmark Corporation Committees: · Audit · Enterprise Risk · Human Resources | Career Highlights: · CEO, MINACT Inc. (Job Training, Development and Management) Other Public Company Boards: · Huntington Ingalls Industries · Mississippi Power Company |
Experience and qualifications: General Collins has served as the CEO of MINACT Inc., a job training, development and management company, since 2016. He retired with the rank of Major General in the Mississippi National Guard, having served as Adjutant General of both the Mississippi Army National Guard and the Mississippi Air National Guard from 2012 to 2016. His 35 years of combined military service in the U.S. Army and the Mississippi National Guard included the command of the 155th Brigade Combat Team in Iraq, where he was responsible for security operations in the southern and western provinces. He was previously appointed by the Governor to the Mississippi Workers’ Compensation Commission where he served as the commission’s representative of labor. General Collins’ years of service and leadership provide him with valuable experience in strategic and financial planning as well as human resources. He is a member of the National Association of Corporate Directors.
Tracy T. Conerly, Director of Trustmark since 2015 (Independent Director)
Trustmark Corporation Committees:
· Finance · Nominating & Governance |
Career Highlights:
(Accounting)
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Experience and qualifications:Mrs. Conerly’sConerly is a certified public accountant and a former certified valuation analyst. Her experience as a former partner at a large certified public accounting firm and former director of BancTrust Financial Group, Inc. (BancTrust), which was acquired by Trustmark in 2013, has provided her with significant financial and accounting expertise, in particularparticularly in the areas of auditing, business valuation and tax.tax, and qualifies her for service as one of the Board’s audit committee financial experts. Mrs. Conerly’s years of service as a director of BancTrust, and BancTrust’s subsidiary banks in Alabama and Florida,a publicly-traded financial institution provide her with valuable experience in financial institution governance and an understanding of markets that are a strategic focus for Trustmark. Mrs. Conerly also served on the Bank Board’s Asset/Liability Committee (the responsibilities of which are now performed by the Finance Committee), providing her with an understanding of Trustmark’s balance sheet strategy, which is a skill essential to the Board’s risk oversight function. She is a member of the National Association of Corporate Directors.
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Director of Trustmark since
Trustmark Corporation Committees:
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Career Highlights:
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Experience and qualifications: Ms. Cooley is theMr. Dewey became president and chief executive officer of Trustmark and the Systems GroupBank on January 1, 2021. He was formerly president and chief operating officer of Companies, which includes Systems Electro Coating, LLC, a Tier One supplierthe Bank from January 1, 2020, to Nissan,December 31, 2020. He served as chief operating officer of the Bank from January 1, 2019, to December 31, 2019, and Systems Automotive Interiors, a Tier One supplieras President of Corporate Banking from 2008 to Toyota. She holds a Juris Doctor degree2018. Mr. Dewey, with 19 years of experience at Trustmark and is a director for another publicly-traded company as well as several non- public organizations. In addition, Ms. Cooley37 years in the financial services industry, has served onworked in diverse geographic markets and in numerous lines of banking businesses. His executive management responsibilities in retail and institutional banking, mortgage, wealth management and insurance services enable him to provide valuable operational, strategic and financial perspectives to the Trustmark National Bank board asBoard. Mr. Dewey is a member of both the Credit Policy and Enterprise Risk Committees, which has given her a solid understandingNational Association of Trustmark’s core business and conservative values. Her leadership experience and business knowledge, with expertise in fields ranging from law to operations and technology, equip Ms. Cooley with the ability to contribute invaluable insight and broad perspective to Board discussions.Corporate Directors.
Director of Trustmark since (Independent Director)
Trustmark Corporation Committees:
· Executive
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Career Highlights:
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Experience and qualifications: Prior to his retirement,qualifications: Mr. GraftonEduardo has served as presidentthe Dean of the School of Business at a leading aviationprivate college in Mississippi since 2003. He holds Ph.D. (Finance) and aerospaceMBA degrees and serves as the Anderson Distinguished Professor of Finance at Mississippi College. Mr. Eduardo, an accomplished academic, has authored numerous articles on a variety of topics, including investment management, compliance, capital management and the pricing of retail banking services, provider. Duringwhich have been published in national and international journals. His expertise in banking and corporate finance, combined with his career,proven marketing and leadership skills, provide valuable marketing, strategic and financial perspectives to the Board, and qualifies him for service as one of the Board’s audit committee financial experts. Mr. GraftonEduardo also served as president and chief executive officer as well as chief operating officer for Raytheon Aerospace, a division of Raytheon Company, a publicly-traded company. His extensive business background, together with his experience on numerous boards and committees, has equipped him with the leadership and consensus-building skills necessary to serve as the ChairmanChair of the BoardBank Board’s Asset/Liability Committee (the responsibilities of which are now performed by the Finance Committee). He is a member of the National Association of Corporate Directors.
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J. Clay Hays, Jr., M.D., 57 Director of Trustmark since 2017 (Independent Director) Trustmark Corporation Committees: · Enterprise Risk (Chair) · Executive · Nominating & Governance | Career Highlights: · Cardiologist, Partner, President, Jackson Heart Clinic, PA |
Experience and Executivequalifications: Dr. Hays is president of Jackson Heart Clinic, PA, one of the largest cardiology groups in Mississippi. He is a former chairman of the Mississippi Healthcare Solutions Institute and former director and past president of the Mississippi State Medical Association. He serves as director and secretary of the Medical Assurance Company of Mississippi, a statewide medical malpractice insurer. He is also a Mississippi Delegate to the American Medical Association House of Delegates and Chair Elect of the Southeast Delegation of the AMA House of Delegates. With extensive experience in the medical industry, Dr. Hays is uniquely positioned to advise Trustmark on the healthcare industry. Dr. Hays also served on the Bank Board’s Asset/Liability Committee Chairman.(the responsibilities of which are now performed by the Finance Committee). He is a member of the National Association of Corporate Directors.
Gerard R. Host, Director of Trustmark since 2010
Chair of Trustmark Board since April 2022 Executive Chairman of Trustmark Board from January 2021 to April 2022 Trustmark Corporation Committees:
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Career Highlights: · Former Executive Chairman, Trustmark Corporation and Trustmark National Bank · Former President and CEO, Trustmark Corporation
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Experience and qualifications:Mr. Host becamehas served as Chair of Trustmark and the Bank since April 2022. He served as Executive Chairman of Trustmark and the Bank from January 1, 2021 to April 26, 2022. Mr. Host served as president and chief executive officer of Trustmark Corporation and Trustmark Nationalchief executive officer of the Bank effectivefrom January 1, 2011, havingto December 31, 2020, and served as president and chief operating officer of Trustmark Nationalthe Bank priorfrom 2011 to that time.December 31, 2019. He also currently servesserved as a director of the Federal Reserve Bank of Atlanta.Atlanta from 2012 until the end of his second term on December 31, 2018. Throughout his 38-year tenure with Trustmark, Mr. Host has served in a variety of executive management capacities, including chief financial officer, chief investment officer and president of various divisions. Mr. Host’s in-depth knowledge of Trustmark’s operations and of the financial services industry enables him to provide both historical and strategic perspectives in Board discussions regarding corporate strategy and governance matters. He is a member of the National Association of Corporate Directors.
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Experience and qualifications: Mr. McCullouch is an associate dean of the University of Mississippi School of Law and was the president of the Mississippi division of a major telecommunications company. Mr. McCullouch’s legal background and business acumen provide him with the necessary skills to assess corporate governance matters and formulate strategy relative to Board planning and oversight. In addition, through his broad and extensive service on other non-public boards, Mr. McCullouch is attuned to the necessity of diversity from various perspectives, which is essential to his service as Nominating Committee Chairman and as Human Resources Committee Chairman.
Harris V. Morrissette,
Trustmark Corporation Committees: · Enterprise Risk · Finance · Human Resources | Career Highlights:
Biscuit Company, Inc. |
Other Directorships:
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Experience and qualifications:qualifications: Mr. Morrissette serves as the president of a regional packaged food and food services company based in Alabama. His extensiveprior years of service as a director of a publicly-traded financial institution provide him with valuable experience in this industry has providedfinancial institution governance and an understanding of markets that are a strategic focus for Trustmark. In addition, Mr. Morrissette’s background and business acumen provide him with significant marketingthe skills necessary to contribute invaluable insight and business leadership skills. Mr. Morrissettebroad perspectives to Board discussions. He also servesserved on the Bank Board andBoard’s Credit Policy Committee (the responsibilities of which are now performed by the Enterprise Risk Committee). Mr. Morrissette is a former directormember of BancTrust, providing him with valuable industry knowledge.the National Association of Corporate Directors.
Richard H. Puckett, Director of Trustmark since 1995 Lead Director of Trustmark since 2020 (Independent Director)
Trustmark Corporation Committees:
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Career Highlights:
Company
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Experience and qualifications:Mr. Puckett is the chairman and chief executive officer of a heavy equipment distribution and rental company with facilities located in Mississippi and eastern Louisiana that serves southern Mississippi, including Jackson, Mississippi, where Trustmark maintains its administrative headquarters.provide heavy equipment, engine power solutions and related supplies to a variety of industries. Mr. Puckett brings marketing and business leadership skills to the Board, as well as an in-depth understanding of the business climate and customer base in Trustmark’s major legacy markets.
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Experience His experience and qualifications: Mr. Summerford has served as the president and chief operating officer and chief financial officer of another publicly-traded company. He was also a certified public accountant. His career experience has resulted in Mr. Summerford’s expertise in understanding financial statements, accounting methodologies and compensation practices, which is essentialBoard tenure provided valuable perspective to his service ason the Audit and FinanceBank Board’s Credit Policy Committee Chairman, as(the responsibilities of which are now performed by the audit committee financial expert and asEnterprise Risk Committee). Mr. Puckett is a member of the Human Resources Committee.National Association of Corporate Directors.
Director of Trustmark since 2009
Trustmark Corporation Committees:
| Career Highlights:
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Experience and qualifications: Mr. Walker has years of experience in retail Quick Service Restaurant consulting and is a former owner/operator of a franchise of a major national restaurant chain. Mr. Walker’s experience in this regard has provided him with a unique and broad perspective of marketing and customer needs. His business skills and experiences on numerous non-public and civic boards demonstrate his ability to work successfully as part of a team and enable him to contribute diverse perspectives to Board discussions.
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Experience and qualifications: Mr. Yates is the president and chief executive officer of a commercial construction company with operating divisions located throughout the Southeast, many of which are within markets served by Trustmark. Mr. Yates’ knowledge of these markets, as well as his leadership experience in the various aspects of the construction industry, including employee relations matters, contract negotiations and risk management, provide the Board with an important resource for assessing and managing risks and planning for corporate strategy. He formerly served as a member of the Bank Board’s Asset/Liability Committee and Credit Policy Committee (the responsibilities of which are now performed by the Finance Committee and Enterprise Risk Committee, respectively). In January 2021, Mr. Yates was appointed a director of the Federal Reserve Bank of Atlanta, New Orleans Branch. In addition, he serves as a director and is former chairman of the Mississippi Economic Council. Mr. Yates is a member of the National Association of Corporate Directors.
18
EXECUTIVE COMPENSATION
Securities Ownership by Certain Beneficial OwnersCompensation Discussion and ManagementAnalysis
Guiding Philosophy.The following table reflects the number of Trustmark shares beneficially owned by (a) persons known by Trustmark to be the beneficial owners of more than 5% of its outstanding shares, (b) directors and nominees, (c) eachguiding philosophy of the named executive officers (NEOs) within the Executive Compensation section, and (d) current directors and executive officers of Trustmark as a group. The persons listed below have sole voting and investment authority for all shares except as indicated. The percentage of outstanding shares of common stock owned is not shown where less than 1%. All percentage computations are based on 68,293,388 shares of Trustmark common stock outstanding as of February 1, 2016, which includes unvested restricted stock. As of February 1, 2016, there were no options outstanding.
Name | Shares Beneficially Owned as of 02/01/16 | Percent of Outstanding Shares | ||||
BlackRock, Inc. | 9,134,493 | (1) | 13.38% | |||
BlackRock, Inc. | ||||||
55 East 52nd Street | ||||||
New York, New York 10055 | ||||||
The Robert M. Hearin Foundation | 5,565,374 | (2) | 8.15% | |||
State Street Corporation | 3,565,803 | (3) | 5.22% | |||
The Vanguard Group | 4,517,582 | (4) | 6.61% | |||
Adolphus B. Baker | 22,956 | (5) | ||||
Tracy T. Conerly | 5,314 | (6) | ||||
Toni D. Cooley | 9,617 | (5) | ||||
Duane A. Dewey | 49,129 | (7) | ||||
Daniel A. Grafton | 38,706 | (5)(8) | ||||
Louis E. Greer | 57,710 | (7) | ||||
Gerard R. Host | 258,115 | (9) | ||||
David H. Hoster II | 13,706 | (5) | ||||
John M. McCullouch | 13,921 | (5) | ||||
Harris V. Morrissette | 9,351 | (10) | ||||
Richard H. Puckett | 28,556 | (5)(11) | ||||
Wayne A. Stevens | 41,395 | (7) | ||||
R. Michael Summerford | 14,706 | (5) | ||||
Breck W. Tyler | 54,365 | (12) | ||||
LeRoy G. Walker, Jr. | 14,064 | (5) | ||||
William G. Yates III | 13,811 | (5) | ||||
Directors and executive officers of Trustmark as a group | 971,544 | (13) | 1.42% |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act) requires Trustmark’s directors, executive officers and persons who own more than 10% of Trustmark’s common stock to file reports of their ownership and changes in ownership of Trustmark’s common stock. Trustmark prepares these reports for the directors and executive officers who request it on the basis of information obtained from them and Trustmark’s records. Based on the information available to Trustmark, Trustmark believes that its directors and executive officers complied with all reporting requirements under Section 16(a) for 2015, with the exception of Mrs. Conerly, whose initial report on Form 3 is considered late due to an inadvertent underreporting of shares held, which was subsequently corrected.
The Human Resources Committee of the Board (the Committee) is responsible for overseeingto attract and retain highly qualified executives and to motivate them to maximize shareholder value while managing risk appropriately and maintaining the development of a program to compensate Trustmark’s management in accordance with Trustmark’s compensation philosophysafety and objectives. The Committee is currently comprised of Messrs. McCullouch (Chairman), Baker, Grafton and Summerford, all of whom are “non-employee directors” (within the meaning of Rule16b-3soundness of the Exchange Act), “outside directors” (within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended), “independent directors” (within the meaning of Rule 5605(a)(2) of the NASDAQ Listing Rules) and otherwise eligible for compensation committee service under the NASDAQ Listing Rules. In addition, no Committee member is a current or former associate of Trustmark or any of its subsidiaries.
The Committee is authorized to retain experts, consultants and other advisors to aid in the discharge of its duties. In accordance with the Committee’s charter, the hiring of such advisors is at the Committee’s discretion, after considering the advisors’ independence.
In the past few years, the Committee has engaged PM&P to provide various analyses and recommendations to aid the Committee in determining the amount and form of director and executive pay consistent with Trustmark’s compensation philosophy and to periodically test Trustmark’s pay-for-performance alignment. Starting in late 2014 and continuing in 2015, management separately engaged PM&P to provide advice on base and incentive compensation for non-executive associates. PM&P does not provide any consulting services to Trustmark other than to the Committee in connection with director and executive pay and to management in connection with non-executive associate compensation, and it maintains no other economic relationship with Trustmark.
The Committee has assessed the independence of PM&P pursuant to SEC and NASDAQ rules and has concluded that the advice it receives from PM&P is objective and not influenced by other relationships that could be viewed as conflicts of interest, including the advice PM&P provides to management relating to non-executive/non-director compensation matters.
Compensation Discussion and Analysis
The following discussion addresses the compensation determinations relating to Trustmark’s NEOs and the rationale for those determinations and should be read in conjunction with the compensation tables for the NEOs beginning on page 19. Although considered “officers” of Trustmark Corporation under the Exchange Act, the NEOs’ compensation, except for equity awards under Trustmark’s stock and incentive compensation plans, is paid by the Bank.
Executive Summary.organization. The Committee believes that executive compensation should be linked to Trustmark’s performance and significantly aligned with both the short-term and long-term interests of Trustmark’s shareholders. The Committee also believes that executive compensation should be designed to allow Trustmark to recruit, retain and motivate employees who play a significant role in the organization’s current and future success. Further, compensation policies and practices should be designed to help develop management talent, promote teamwork among, and high morale with, executive management, establish effective corporate governance, and set compensation at competitive levels.
Trustmark’s compensation policies reflect the Committee’s guiding philosophy, as shown below:
What we do:
✓ | Substantial portion of executive pay based on performance against goals set by the Board |
✓ | Stock ownership requirements for executive officers |
✓ | Independent compensation consultant regularly advises the Committee |
✓ | Minimum vesting periods of not less than three years for equity awards, with three-year cliff vesting of time-based awards |
✓ | Clawback provisions that permit Trustmark to recover incentive-based compensation under certain circumstances |
✓ | Use of peer company data to help set executive compensation |
✓ | Annual advisory votes on executive compensation |
✓ | Oversight of compensation by the Human Resources Committee, which is comprised solely of independent directors |
What we don’t do:
No automatic or guaranteed annual salary increases |
No guaranteed bonuses or guaranteed long-term incentive awards |
No tax gross-ups for executive officers |
No “single-trigger” change in control severance payments |
No hedging of Trustmark stock |
No excessive perquisites |
Key Elements of Compensation.The following table summarizes key elements of Trustmark’s executive compensation program and the primary objectives each element supports. The Committee believes these elements are standard compensation components for named executive officers (NEOs) at Trustmark’s peer companies:
Key Elements | Objectives | |
Base salary | · Attract and retain highly qualified executives · Reward prior performance, industry and job specific knowledge, experience and leadership ability | |
Annual cash bonuses | · Reward achievement of annual corporate goals and, where applicable, line-of-business goals | |
Performance-based restricted stock | · Reward achievement of long-term objectives · Create a direct link between management’s performance and shareholder value | |
Time-based restricted stock | · Align shareholder and management interests · Retain key executives · Supports achievement of stock ownership goals |
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Alignment Between Pay and Performance.Trustmark is committed to aligning the compensation of its executive officers with Trustmark’s financial and operational performance. The Committee believes that its current executive compensation program is workinghelping to achieve these goals as evidenced by aligning compensation with Trustmark’s strong financial performance in 2015.performance. Key financial and core operating results for the year include2022 included the following:
Financial Metrics and Ratios
Loans held for investment (HFI) increased $2.0 billion, or 19.1%, |
Nonperforming assets declined to 0.55% of |
Net charge-offs represented 0.01% of average loans in 2022, |
Net interest income FTE totaled $507.1 million, up 17.9% in 2022 to produce a net interest margin of |
Insurance revenue increased 10.7% in 2022 while wealth management revenue remained stable, |
Noninterest income totaled $205.1 million and represented 29.3% of total |
Revenue totaled $699.9 million |
Noninterest expense, excluding litigation settlement expense of $100.8 million, totaled $502.5 million, up 2.7% from the prior year, |
Net income totaled |
Trustmark continued to build upon and expand customer relationships, especially$1.17. Excluding litigation settlement expense, which reduced net income by $75.6 million, net income totaled $147.5 million, representing diluted earnings per share of $2.40. Information regarding the litigation settlement is included in the Alabama, Florida, Tennessee and Texas markets, continued to improve credit quality, and continued to invest in technology and infrastructure to optimize retail delivery channels to enhance productivity and efficiency and support future growth.
Trustmark’s performance-based equity awards are measured utilizing two financial measures over a three-year period: ROATE and total shareholder return (TSR), which includes dividends. For the three years ended December 31, 2015, Trustmark ranked in the 56.9th percentile for ROATE and in the 4.6th percentile for TSR among the 23 peer companies utilized in Trustmark’s 2013 performance-based restricted stock awards. Trustmark’s ROATE continued to reflect strong performance relative to its peer group, while Trustmark’s TSR relative to its peer group continued to be affected by significant appreciation in stock values by certain of the peer companies in the three years ended December 31, 2015. Trustmark’s TSR equaled 10.65% for the three years ended December 31, 2015.
While the overall structure of Trustmark’s 2015 executive compensation program remained relatively unchanged from 2014, the following are the material items pertaining to the NEOs:
Trustmark’s |
Paid quarterly dividend of |
Maintained strong capital position with CET1 ratio of |
Expanded market optimization efforts with a net reduction of 11 branch offices during the |
Continued technology investments to |
Alignment Between PayReturn on average tangible equity is a non-GAAP financial measure, but does not have a comparable GAAP financial measure. Return on average tangible equity is calculated using net income adjusted for intangible amortization divided by total average tangible common equity (total shareholders’ equity less goodwill and Performance. Trustmark is committedother identifiable intangible assets); it excludes the impact of (i) restructurings, discontinued operations, extraordinary items and other significant non-routine transactions, (ii) material litigation and insurance settlements, (iii) changes to aligning the compensationcomply with ASU 2016-02 and ASU 2016-13, and (iv) cumulative effects of the executive officersincome tax and accounting changes in accordance with Trustmark’s financial and operational performance. US GAAP.
The Committee uses both annual cash bonuses and performance-based equity awards to link executive pay with Trustmark’s performance. Annual cash bonuses, which are earnedPayouts under the annual management incentive plan and in recent years have represented approximately 32% of the CEO’s and 29% of the other NEOs’ total annual compensation, are earned based on Trustmark’s achievement of key corporate, strategic and line of business performance goals, as applicable, from Trustmark’s annual profit plan.goals. A minimum achievement of 80% of the budgeted goalsthreshold is required to earn the minimum annual cash bonus, and Trustmark performance that exceeds the budgeted goalstarget results in higher bonus awardsawards. In 2022, Trustmark’s performance resulted in average payouts for the year.NEOs under the annual management incentive plan of 160.0% of target, out of a maximum potential payout of 200%. In recent years, cash bonuses under the annual management incentive plan have averaged approximately 37.0% of the CEO’s and 33.3% of the other NEOs’ total annual compensation.
Total equity awards granted in 2022 represent approximately 31% for the CEO’s, and 25% for the other NEOs’, total annual compensation. Performance-based equity awards grants ofgranted in 2022, which in 2015 represented approximately 25%16% (for the CEO) and 15%13% (for the other NEOs) of each NEO’s total annual compensation, arewill be earned based on Trustmark’s achievement of return on average tangible equity (ROATE), compared to an absolute target level, and total shareholder return (TSR), which includes dividends, compared to Trustmark’s peer group, in each case over a three-year performance period. The performance-based equity awards granted in 2020 were earned based on Trustmark’s achievement of ROATE compared to an absolute target level and TSR, which includes dividends, compared to Trustmark’s peer group, in each case over a three-year performance period, withperiod. Trustmark’s performance over the three years ended December 31, 2022 resulted in combined vesting up to 200%achieved for the performance-based restricted stock awards granted in 2020 of 94.75%.
Time-based equity awards, which in 2022 represented approximately 16% of total annual compensation (for the eventCEO) and 13% (for the other NEOs), further encourage a focus on long-term growth and financial success by aligning the interests of performance at or above the 75th percentilemanagement and Trustmark’s shareholders.
As a result of the peer group for both measures.
Instructure of Trustmark’s annual management incentive plan and its performance-based equity awards, the case of Mr. Tyler, Trustmark also has a quarterly production bonus incentive based on the mortgage department’s production. Mr. Tyler’s production bonus is calculated based on a percentage of total mortgage production above a threshold production level, which links his quarterly compensation to Trustmark’s mortgage department performance.
The Committee believes that Trustmark’s strong financial performance in the past three years demonstrates that the executive compensation programs are working as intendedawarded to promote both short-term and long-term success of Trustmark,its NEOs is effectively aligned with total annual compensation earned affected either positively or negatively based on corporateTrustmark’s performance. Average payouts of annual cash bonuses under the management incentive plan of 142%158.7% of the target amount for each of the NEOs for the past three years relates directly to Trustmark’s achievement with respect to corporate and line of business budget targets for those years. Vesting of the performance-based equity awards of 63%94.75%, 88%42.2% and 77%93.5% for the three years ended December 31, 2015, 20142022, 2021 and 2013,2020, respectively, reflects how the amount of this incentive compensation earned depends entirely on Trustmark’s performance, including compared to its peer companies. During
2022 Say on Pay Vote.In 2022, the three years ended December 31, 2015, Trustmark’s ROATE continued to reflect strong performance relative to its peer group, while its TSR compared to peers continued to be affected by significant stock price fluctuations, which has resulted in less than the target (100%) vesting for the 2013 performance-based equity awards. As a result, the Committee believes thatadvisory shareholder vote on Trustmark’s executive compensation is appropriately aligned with the level of corporate performance directly and in comparison to Trustmark’s peer companies.
2015 Say on Pay Vote. In 2015, Trustmark asked its shareholders, through an advisory vote, to approve the compensation of the named executive officers as described in the proxy statement for the 2015 Annual Meeting of Shareholders. The advisory vote received overwhelming support from shareholders, receiving approval of over 98%97.3% of the votes cast on the proposal. The Committee considered the results of this advisory vote on Trustmark’s executive compensation by Trustmark’s shareholders, and inIn light of such strong support, during the remainder of 20152022 and in 2016
2023, the Committee has continued to apply the same compensation philosophy and practices that werewas described in the 20152022 proxy statement in determining amounts and types of executive compensation. The Committee believes that the strong shareholder support for approval of the executive compensation as described in the 2015 proxy statement is evidence that Trustmark’s executive compensation program is appropriately tailored to Trustmark’s business strategies, appropriately aligns pay with performance and reflects industry best practices regarding executive compensation.
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Board and Committee Process.TheIn considering appropriate levels of compensation for executives, the Committee reviews and recommends to the Board compensation levels for the CEO and CFO and reviews and recommends to the Bank Board compensation levels for the Bank’s executive management, based ontakes into account Trustmark’s performance and individual performance and experience, as well as peer and broader financial services industry comparisons (referred to as market data) and company affordability analysis. When deemed appropriate, the Committee will request that its independent compensation consultant, Pearl Meyer & Partners, LLC (Pearl Meyer), provide it with survey data of executive compensation for financial services companies that are comparable to Trustmark, generally based on line of business and asset size. The Committee initiates, develops and recommends for approval by the Board the cash and equity compensation of the CEO, based on the Committee’s evaluation of the CEO’s performance relative to annual corporate goals and objectivesdoes not request such market data from Pearl Meyer every year, and in conjunction with comparative marketyears when such data provided by PM&P and internal data provided by human resources personnel. For cash compensation of the other NEOs, the CEO, with input from the Human Resources department, makes recommendationsis not requested, Trustmark will apply customary aging methods to the Committee, which are considered for approval by the Committee and then recommendedestimate appropriate updates to the Board in the case of the CFO and the Bank Board in the case of the other NEOs for their review and approval. With respect to equity compensation awarded to other NEOs and associates, the Committee reviews and recommends stock-based awards for approval by the Board. The Committee has delegated authority to the CEO to grant limited equity awards to senior level officers, which are reviewed by the Committee. The Committee also administers Trustmark’s equity-based compensation plans, deferred compensation plans and other benefit plans.salary data.
The ChairmanChair of the Committee works with the CEO and the Human Resources department to establish the agenda for Committee meetings. The CEO and Human Resources department also interface with the Committee in connection with the Committee’s executive compensation decision-making, providing comparative market data as well as making recommendations. The Committee periodically meets with the CEO and members of the Human Resources department to assess progress toward meeting objectives set by the Board for both annual and long-term compensation. The Committee also meets in executive session without management present when appropriate.
The Committee believes that the total compensation opportunity available to members of management should consist of base salary, annual cash bonuses, equity-based compensation, retirement benefits and perquisites, each of which is a standard compensation component for NEOs at Trustmark’s peer companies. The Committee reviews all of thesethe components of compensation in making determinations on the mix, amount and form of executive compensation. In making compensation decisions, the Committee seeks to promote teamwork among, and high morale within, executive management, including the NEOs. While the Committee does not use any quantitative formula or multiple for comparing or establishing compensation for executive management, it is mindful of internal pay equity considerations and assesses the relationship of the compensation of each executive to other members of executive management.
The Committee, in consultation with management and PM&P, continues to evaluate the executive compensation program and will recommend changes when it believes appropriate in light of evolving company needs and industry best practices.
The Committee’s decisions regarding entering into change in control agreements with executive management and increasing the size of the annual equity-based awards granted to executive management, as further described below, illustrate this ongoing process. All determinations regarding the amount or form of executive compensation are made by the Committee, approved by the Board or Bank Board, as appropriate, and reflect factors and considerations in addition to the information and advice provided by any single source.
Guiding Philosophy.The Committee’s guiding philosophy is to attract and retain highly qualified executives and to motivate them to maximize shareholder value while limiting risk appropriately and maintaining the safety and soundness of the organization. The following objectives serve as guiding principles for all compensation decisions:
Role of the Compensation Consultant. In the past few years, theConsultant.The Committee has engaged PM&Prelies on Pearl Meyer to provide information, analyses and advice to aid in the determination of competitive non-employee directorexecutive and executivenon-employee director pay consistent with Trustmark’s compensation philosophy. PM&P’sphilosophy, and periodically engages Pearl Meyer to test Trustmark’s pay-for-performance alignment. The Committee has assessed the independence of Pearl Meyer pursuant to SEC and Nasdaq rules and has concluded that the advice it receives from Pearl Meyer is objective and not influenced by other relationships that could be viewed as conflicts of interest.
With respect to Trustmark’s compensation program for executives and non-employee directors for 2022, Pearl Meyer’s services for the Committee during 2014 and a portion of 2015 for compensation to be paid in 2015 included:
providing market data regarding executive compensation in the |
· | providing competitive market analysis for the Executive Strategy and Management Committees, with consideration of |
· | reviewing the annual management incentive plan |
providing recommendations regarding compensation for |
providing market practices and trends for executive retirement and equity plans, |
· | providing input on leadership succession planning, |
· | providing recommendations regarding the composition of Trustmark’s peer group, and |
· | reviewing drafts of this Compensation Discussion and |
PM&P made presentations on Trustmark’s executive compensationBenchmarking.When determining the amount and annual incentive compensation practices at multiple Committee meetings during 2014 and 2015 to plan for executive compensation to be paid in 2015.
Benchmarking. The Committee believes that pay practices at other companies provide useful reference information when establishingform of compensation for Trustmark’s executives. Therefore, among other factors,executives, the Committee considers comparative executive compensation information provided by PM&PPearl Meyer that is derived from two primary data sources: peer group data and market data from the banking and financial services industry, when determining the amount and form of compensation for executives.
Peer Group Data. The peer group data is gathered by PM&P from the proxy statements of a peer group of financial institutions in the United States. The peer group consists of a minimum of 15 financial institutions and is updated annually by the Committee, based on a process that includes recommendations from internal sources, including the Human Resources department, and external sources such as PM&P, to reflect the companies against which Trustmark competes for executive talent or for shareholder investment. The specific characteristics of the financial institutions comprising the peer group vary from year to year, but the companies are chosen based on having similar asset size to Trustmark, offering similar banking functions and having similar organizational structure. All 23 companies comprising the peer group for the Committee’s 2015 executive compensation determinations were the same as used by the Committee for its 2014 determinations. As of September 30, 2014, the 23 peer companies all had assets within a range of approximately 50% to 225% of Trustmark’s asset size, which is considered an appropriate range for comparison purposes. The specific asset sizes for the peer companies listed in the report presented to the Committee in December 2014 ranged from approximately $7.0 billion to $27.4 billion, and the market capitalizations ranged from approximately $1.1 billion to $5.1 billion. Trustmark’s market capitalization and asset size were both below the median for this peer group.
For 2015, Trustmark’s peer group consisted of the following companies:
Market Data. The market data used by the Committee consists of survey data of executive compensation for financial services companies that focus on the commercial banking industry, with an orientation toward regional bank holding companies with a total asset size comparable to Trustmark. This market data is compiled by PM&P from various published and private compensation surveys, and when available for a particular job responsibility, proxy statements of the peer group financial institutions, and provides information from a broad cross-section of financial services companies.industry. The Committee does not have PM&P compile such market data every year. For years in between formal compilation of market data, Trustmark will apply customary aging methods to informally update salary data and/or will rely on the most current data from a prior year.
Use of Compensation Data. The Committee uses the peer group data primarily to establish performance goals for long-term incentive awards and evaluateto assist in the evaluation of its pay for performancepay-for-performance alignment. The Committee also uses the peer group data and, theas applicable, market survey data, to assist with assessing Trustmark’s compensation competitiveness. The Committee is of the general view that, to attract, retain and motivate highly qualified executives, its executive compensation should be in the median range of compensation levels for management of similar-sized financial institutions with Trustmark’s level of corporate performance. Therefore, in making its 2015 compensation recommendations, the Committee considered market data comparisons previously prepared by PM&P for 2014, including an analysis of the 25th, 50th (median) and 75th percentile of the compensation for base salary (aged forward using a predetermined factor), annual cash incentive, long-term equity incentives and the total of these elements as a point of reference for each NEO.
Recognizing that comparative pay assessments have inherent limitations, due to the lack of precise comparability of executive positions between companies, as well as the companies themselves, the comparative data are used only as a guide and the Committee does not fix any NEO’s compensation (or individual compensation elements) to a particular compensation level within this comparative data. In exercising its judgment to set pay levels, the Committee looks beyond the comparative data and also considers individual job responsibilities, individual performance, experience, compensation history (both at Trustmark and at prior employers in the case of new hires)newly hired associates), company performance and company goals.
Peer Group Data.The peer group data is gathered by Pearl Meyer from the proxy statements of a peer group of financial institutions in the United States. The peer group consists of a minimum of 15 financial institutions and is updated annually by the Committee, based on a process that includes recommendations from internal sources, including the Human Resources department, and external sources such as Pearl Meyer, to reflect the companies against which Trustmark competes for executive talent or for shareholder investment. The specific characteristics of the financial institutions comprising the peer group vary from year to year, but the companies are chosen based on a combination of various factors that include asset size and business mix. Additionally, the peer group is limited to financial institutions with at least $10 billion in total consolidated assets, as the Dodd-Frank Act and its implementing regulations impose various additional regulatory and operational requirements on bank holding companies with $10 billion or more in total consolidated assets.
Trustmark’s peer group, as reviewed by the Committee in February 2022, consisted of 20 peer companies, all of which had assets within a range of approximately 68% to 208% of Trustmark’s asset size, which the Committee considers an appropriate
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range for comparison purposes. The specific asset sizes for the peer companies listed in the report presented to the Committee ranged from approximately $12.0 billion to $36.5 billion, and the market capitalizations ranged from approximately $1.6 billion to $5.7 billion. Although Trustmark’s market capitalization and asset size were both below the median for this peer group, the Committee felt it appropriate to limit the peer group to institutions with at least $10 billion in total consolidated assets, as these institutions are subject to the same regulatory mandates as Trustmark.
For 2022, Trustmark’s peer group consisted of the following companies:
Company Name | Ticker | Company Name | Ticker | Company Name | Ticker | |||||||
Ameris Bancorp | ABCB | First Financial Bancorp | FFBC | NBT Bancorp, Inc. | NBTB | |||||||
Associated Banc-Corp | ASB | First Merchants Corporation | FRME | Renasant Corporation | RNST | |||||||
Atlantic Union Bankshares Corporation | AUB | Fulton Financial Corporation | FULT | Simmons First National Corporation | SFNC | |||||||
Banner Corporation | BANR | Glacier Bancorp, Inc. | GBCI | United Bankshares, Inc. | UBSI | |||||||
Eastern Bankshares, Inc. | EBC | Hancock Whitney Corporation | HWC | United Community Banks, Inc. | UCBI | |||||||
FB Financial Corporation | FBK | Heartland Financial USA, Inc. | HTLF | WesBanco, Inc. | WSBC | |||||||
First Busey Corporation | BUSE | Independent Bank Group, Inc. | IBTX |
Market Data.In making its 2022 compensation recommendations, the Committee considered market data comparisons prepared by Pearl Meyer in August 2021, including an analysis of the 25th and (median) 50th percentile of the compensation for base salary, annual cash incentive, long-term equity incentives and the total of these elements as a point of reference for the positions of President and CEO and the other NEOs.
Compensation Mix. TheMix. While the Committee considers the overall mix of executives’ pay between base salary, annual cash bonus and long-term incentive compensation, the Committee does not target a specific allocation among the various compensation components. Generally, more than one-half of the CEO’s compensation is contingent on performance, and approximately one-half of the compensation provided to the other NEOs is contingent on performance. The approximate percentages of salary, bonus and equity-based (using grant date fair value) compensation compared to the total of such compensation (referred to as total annual compensation) for 2015 for the NEOs were as follows:
Name | Base Salary % | Cash Bonus % | Equity Award % | |||
Gerard R. Host | 37% | 27% | 36% | |||
Louis E. Greer | 52% | 25% | 24% | |||
Duane A. Dewey | 53% | 22% | 25% | |||
Wayne A. Stevens | 49% | 27% | 24% | |||
Breck W. Tyler | 37% | 47% | 16% |
The compensation package of Mr. Tyler, President-Mortgage Services, differs from the other NEOs. In addition to the annual cash bonus opportunity under the management incentive plan, Mr. Tyler also receives a quarterly production bonus based on the mortgage department’s production, which accounted for approximately 25% of his total annual compensation in 2015. Mr. Tyler’s “Cash Bonus %” shown above reflects both his annual bonus under the management incentive plan and the mortgage department production bonuses he earned in 2015. In allocating compensation among salary, bonus and equity-based compensation, the Committee believes that the compensation of the senior-most levels of management with the greatest ability to influence Trustmark’s performance should be significantly performance-based, while lower levels of management should receive a greater portion of their compensation in base salary. The Committee also makes allocations between short-term and long-term compensation for NEOs.
The Committee believes long-term equity awards are effective in aligning management’s interests with shareholder interests to increase overall long-term shareholder value, rewarding NEOs for implementing long-term initiatives that take more than one fiscal year to accomplish, and promoting stability and continuity among the NEOs. However, a portion of the NEOs’ annual compensation is also linked to Trustmark’s short-term performance to motivate and reward executives to achieve annual profit plan objectives and to attract and retain talented executives. In making these decisions, the Committee considers the comparative market data and the recommendations of the CEO, among other things. Consistent with its executive compensation philosophy and goals, in 2015,2022, the Committee provided that for the senior-most levels of management 100% of short-termannual cash incentive payments and 67%50% of long-term equity-based awards would be determined bybased on achievement of performance achievement.
The approximate percentages of salary, bonus and equity-based (using grant date fair value) compensation compared to the total of such compensation (referred to as total annual compensation) for 2022 for the CEO and the other NEOs (averaged) were as follows:
The compensation elements for the CEO for 2022 were allocated as follows: 30% for base salary, 39% for cash bonus, and 31% for equity awards. On average, the compensation elements for the other NEOs for 2022 were allocated as follows: 39% for base salary, 36% for cash bonus, and 25% for equity awards. Equity awards consist of both performance-based awards and time-vesting awards. Variable pay includes cash incentives, performance-based equity awards and time-vesting equity awards, the value of which varies with changes in Trustmark’s stock price. The equity awards percentage in the above calculations were valued as of the grant date based on the fair market value of the underlying stock. Other benefits, including Trustmark’s allocations and contributions to benefit plans and perquisites, are not considered in the above calculations. For more information on these benefits, please see “All Other Compensation for 2022” table on page 31.
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Base Salaries.Trustmark’s goal is to provide its executive management with fixed cash compensation in the form of base salary that will attract and retain highly qualified executives. Trustmark also uses base salary to reward top performance, industry and job specific knowledge, experience and leadership ability. The base salaries for Trustmark’s NEOs are typically established in the first quarter of the year after Trustmark’s financial information and performance results from the previous year are available, although mid-year adjustments are made occasionally to reflect changes in responsibility or other developments. The CEO’s base salary is established initially in an employment agreement but may be adjusted thereafter in the Committee’s discretion.
In establishing the CEO’s base salary, the Committee typically considers PM&P’sPearl Meyer’s recommendations based on an analysis of peer group data and market data and also considers internal data provided by human resources personnel and the CEO’s individual performance and contributions relative to Trustmark’s corporate goals. In establishing base salaries of Trustmark’s other NEOs, the Committee typically considers the recommendations of the CEO, which are based on individual responsibility level, individual and company performance, total compensation histories for each such NEO, the market data provided by PM&PPearl Meyer for similar positions and a general understanding of executive compensation in the financial services industry. The CEO evaluates thesuch other NEOs’ performance using the same metrics normally used for determining annual management incentive plan awards. The Committee considers each of these factors but does not assign a specific value to any of them. The Committee’s process also involves a subjective component in evaluating each NEO’s overall span of responsibility and control, knowledge and leadership ability.
With a focus on aligning executive compensation with shareholder interestsEffective March 1, 2022, the Board approved increases in base salary of 14.29% for Mr. Dewey and making long-term equity compensation more competitive, the Committee recommended11.11% for Mr. Owens, and the Corporate Board and Bank Board as appropriate, determined not toapproved a 2.00% increase in base salaries for Messrs. Host, Greer, Dewey orHarvey, Stevens in 2015 in consideration of the increase in the size of the annual equity-based awards granted to them in 2015 as members of the executive strategy committee. In view of his mortgage production bonus incentive opportunity, the Committee recommended and the Bank Board determined not to increase Mr. Tyler’s base salary in 2015.
Tate. The base salaries as of December 31, 2014, remained in effect with no change during 2015 as2021 and 2022 are shown below:
Name | 2015 Base Salaries ($) | 2014 ($) | % Change (%) | |||
Gerard R. Host | $ 730,000 | $ 730,000 | --- | |||
Louis E. Greer | $ 360,000 | $ 360,000 | --- | |||
Duane A. Dewey | $ 348,840 | $ 348,840 | --- | |||
Wayne A. Stevens | $ 333,540 | $ 333,540 | --- | |||
Breck W. Tyler | $ 306,000 | $ 306,000 | --- |
Name | 2022 Base Salaries ($) | 2021 Base Salaries ($) | Percent Change (%) | |||||||||
Duane A. Dewey (1) | $ | 800,000 | $ | 700,000 | 14.29 | % | ||||||
Thomas C. Owens | $ | 400,000 | $ | 360,000 | 11.11 | % | ||||||
Robert B. Harvey | $ | 408,000 | $ | 400,000 | 2.00 | % | ||||||
Wayne A. Stevens | $ | 402,289 | $ | 394,401 | 2.00 | % | ||||||
Granville Tate, Jr. | $ | 408,000 | $ | 400,000 | 2.00 | % |
(1) | 2021 Base salary was established in accordance with Mr. Dewey’s employment agreement. |
Cash Bonuses. The Committee typically awards cash bonuses utilizing a structured, objective approach based upon the achievement of performance objectives set forth in an annual management incentive plan. Cash bonuses constitute the largest cash component tied specifically to company performance. Cash bonuses under the annual management incentive plan are designed to reward achievement of Trustmark’s corporate goals and objectives, and, where applicable, line of business goals and objectives. The quarterly cash bonus under Mr. Tyler’s mortgage department production bonus incentive is designed to reward achievement of Trustmark’s goals with respect to mortgage loan production above a certain threshold level, consistent with the Bank’s mortgage origination guidelines.
Annual Management Incentive Plan. Key features of the annual management incentive plan, each as may be adjusted by the Committee, include:
At the beginning of each year, Trustmark develops a bonus matrix for the management incentive plan. The performance goals are keyed to various goals in Trustmark’s profit plan for the year,corporate, strategic and, where applicable, line of business objectives, and the performance results at or slightly above the target levels are intended to be achievable, but challenging. In developingThe CEO recommends the bonus matrix the CEO recommends to the Committee, including overall incentive target payout levels for each NEO, stated as a percentage of base salary. The CEO also recommends the performance measures from Trustmark’s annual profit plan, such as NI, ROATE, credit quality measures and non-interest expense, each as may be adjusted by the Committee, and the weightings to be assigned to the performance measures for each NEO. Target level range for the CEO is established in his employment agreement.
For 2022, the Committee decided to add a performance goal for non-interest expense (Core) at 20% weighting through a corresponding decrease in weighting of 10% each to the metrics of efficiency ratio and EPS. The performance range for efficiency ratio was changed to better align with the market and the same range was applied to the new non-interest expense goal. Non-interest expense (Core) is a non-GAAP financial measure and excludes the impact of extraordinary items and other significant non-routine transactions as well as material litigation and insurance settlements. Efficiency ratio is also a non-GAAP financial measure and is calculated by dividing adjusted non-interest expense (which excludes significant non-routine transactions and material litigation and insurance settlements) by adjusted revenue (which reflects certain tax-equivalent adjustments).
The Committee reviews the CEO’s recommendations along with, as applicable, market data to ensure that proposed target payout levels provide an appropriate opportunity to earn bonuses and are competitive with the companies in Trustmark’s peer group. In addition, theThe Committee reviews the recommended performance measures and weightings, as well as the threshold and maximum performance ranges, andthen makes a recommendation to the Board for approval. In making its recommendation, the Committee may consider events outside the influence or control of the NEOs and may adjust the performance goals to exclude the effect of these events. The Committee did not include any such adjustments when
recommending the performance goals for 2015. After the target levels and performance goals and weightings have been approved by the Board, the Committee retains the discretion to adjust the target levels and performance goals and weightings during or after the year, on an individual or group basis, if the Committee determines additional adjustments are appropriate for this purpose. The Committee did not make any such adjustments for 2015.during 2022. Following the end of a year, the Committee also has discretion to increase or decrease the amount of an award earned under the plan, change the individual weightings or adjust the threshold payout level and minimum performance goals, including when the minimum performance goals are not achieved. The Committee did not make any such changes or adjustments for the 2015 bonus payouts.
In 2014, the Committee engaged PM&PCommittee’s exercise of discretion is intended to evaluate the competitiveness of the opportunity provided by Trustmark’s management incentive plan and make recommendations to improve the plan’s pay for performance alignment and risk mitigation features, consistent with current best practices, emerging regulatory guidance and Trustmark’s compensation philosophy and strategic objectives, including an analysis of the plan’s performance goals relative to Trustmark’s peer company practices. Based on recommendations of PM&P, the Committee recommended and the Corporate and Bank Boards approved the following adjustments toensure the management incentive plan appropriately rewards performance and neither overpays for 2015:results nor under rewards accomplishments achieved during the year.
With these adjustments incorporated, the23
The following are the primary features of the management incentive plan:plan for 2022:
uses |
includes corporate strategic operational drivers, |
includes a range of potential payouts |
The following table shows the threshold, target and potential maximum bonus payout levels established for each NEO under the management incentive plan, expressed as a percentage of base salary, for 2015:2022:
Name | Below Threshold Bonus Payout Level (as percentage of salary) (1) | Threshold Bonus Payout Level (as percentage of salary) | Target Bonus Payout Level (as percentage of salary) | Potential Maximum Bonus Payout Level (as percentage of salary) | Below Threshold Bonus Payout Level (as percentage of salary) (1) | Threshold Bonus Payout Level (as percentage of salary) | Target Bonus Payout Level (as percentage of salary) | Potential Maximum Bonus Payout Level (as percentage of salary) | ||||||||
Gerard R. Host | --- | 35.0% | 70% | 140% | ||||||||||||
Louis E. Greer | --- | 22.5% | 45% | 90% | ||||||||||||
Duane A. Dewey | --- | 22.5% | 45% | 90% | --- | 40.0% | 80% | 160% | ||||||||
Thomas C. Owens | --- | 25.0% | 50% | 100% | ||||||||||||
Robert B. Harvey | --- | 30.0% | 60% | 120% | ||||||||||||
Wayne A. Stevens | --- | 22.5% | 45% | 90% | --- | 25.0% | 50% | 100% | ||||||||
Breck W. Tyler | --- | 20.0% | 40% | 80% | ||||||||||||
Granville Tate, Jr. | --- | 30.0% | 60% | 120% |
(1) | If performance is below the threshold level for each of an NEO’s goals under the management incentive plan, no bonus is earned under the plan absent exercise of discretion by the Committee. |
Mr. Host’s overall target bonus payout level is established in his employment agreement. For the other NEOs, the 2015 target bonus payout levels were consistent with the 2014 levels. For 2015, overall incentive targets for NEOs were allocated among corporate performance goals, strategic operational drivers and, for NEOs working in specific lines of business, line of business goals. The corporate performance goals related to NI and ROATE, the strategic operational drivers related to revenue, efficiency (in the form of non-interest expense) and credit quality (in the form of non-performing assets to total loans and ORE), and the line of business goals related to these same or similar measures as applied to the specific line of business.
The following table shows the weightings of these goals for each NEO for 2015, which, similar to 2014, were selected for consistency in approach among NEOs with comparable responsibilities:
Name | Corporate Performance Goals | Strategic Operational Drivers | Line of Business Goals | |||
Gerard R. Host | 70% | 30% | --- | |||
Louis E. Greer | 70% | 30% | --- | |||
Duane A. Dewey | 30% | --- | 70% | |||
Wayne A. Stevens | 30% | --- | 70% | |||
Breck W. Tyler | 30% | --- | 70% |
For 2015 the threshold and maximum performance levels continue to reflect the uncertainty of achieving the goals and provide variability in pay for changes in performance while also requiring high performance to reach the maximum payout level. Including the adjustments discussed above, for the 2015 bonus matrix, the Committee recommended and the Board approved the following threshold and maximum performance levels for the NEOs:
Performance Goal | Threshold Performance Level (as percentage of performance goal) | Maximum Performance Level (as percentage of performance goal) | ||
Corporate Performance Goals: | ||||
Net income | 80% | 120% | ||
ROATE | 80% | 120% | ||
Corporate/Strategic Operational Drivers: | ||||
Total revenue (net interest income + non-interest income) | 85% | 115% | ||
Non-interest expense | 110% | 90% | ||
Non-performing assets/total loans + ORE | 120% | 80% | ||
Line of Business Goals: | ||||
Total revenue | 85% | 115% | ||
Non-interest expense | 110% | 90% | ||
Criticized loans/total loans | 120% | 80% | ||
Net income | 80% | 120% |
Depending on performance achievement against the stated goals, the payout percentage, if any, for 20152022 could range from a level of 50% of the target bonus payout (for threshold performance achievement) to a level of 100% (for target performance achievement) to a level of 200% (for maximum performance achievement). If performance is below the threshold level for each of an NEO’s goals under the management incentive plan, no bonus is earned under the plan absent exercise of discretion by the Committee.
In early 2016,For 2022, overall incentive targets for NEOs were allocated among a corporate performance goal and corporate strategic operational drivers. The following table shows the weightings of these goals for each NEO for 2022:
Name | Corporate Performance Goal | Corporate Strategic Operational Drivers | ||||
Duane A. Dewey | 40% | 60% | ||||
Thomas C. Owens | 40% | 60% | ||||
Robert B. Harvey | 40% | 60% | ||||
Wayne A. Stevens | 40% | 60% | ||||
Granville Tate, Jr. | 40% | 60% |
For 2022, the threshold and maximum performance levels continue to reflect the uncertainty of achieving the goals and provide variability in pay for changes in performance while also requiring high performance to reach the maximum payout level. For the 2022 bonus matrix, the Committee reviewed Trustmark’srecommended, and the Board approved, the following threshold and maximum performance comparedlevels for the NEOs:
Performance Goal | Threshold Performance Level (as percentage of performance goal) | Maximum Performance Level (as percentage of performance goal) | ||
Corporate Performance Goal: | ||||
EPS | 85% | 115% | ||
Corporate/Strategic Operational Drivers: | ||||
Efficiency Ratio | 105% | 95% | ||
Non-performing assets/total loans + ORE, excluding PPP loans | 120% | 80% | ||
Non-Interest Expense (Core) | 105% | 95% |
In the fourth quarter of 2022, Trustmark recorded a $100.8 million expense in non-interest expense related to the agreement to settle litigation arising from Trustmark’s historical banking relationship with the Stanford Financial Group (the “Stanford settlement”). The Stanford settlement is described in Trustmark’s Current Report on Form 8-K filed on January 3, 2023. In accordance with the terms of the management incentive plan, following the end of the year the Committee exercised its discretion to recommend that the Board approve (and the Board so approved) the exclusion of the Stanford settlement expense in its entirety from the calculation of EPS and the other performance goals establishedmeasures for 2022 under the management incentive plan. The Committee determined that it would be inappropriate to penalize management for its decision to settle the Stanford litigation, as the Committee and Board felt such settlement was in the best long-term interests of Trustmark and its shareholders, and that management should be recognized for its decision to approve the Stanford settlement not knowing whether it would impair their overall compensation. In addition, the Committee noted that none of the executives eligible to participate in the management incentive plan (including the NEOs) engaged in any actions in connection with Trustmark’s banking relationship with the Stanford Financial Group that contributed adversely to the company’s exposure to claims settled by the Stanford Settlement. For
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these reasons, the Committee concluded, and the Board agreed, that the exclusion of the Stanford settlement expense from the applicable performance measures would appropriately reward the NEOs for 2015.Trustmark’s performance in 2022, which, but for the Stanford settlement, would have resulted in metrics that would have generated significant incentive compensation payments. The Committee further concluded, and the Board agreed, that taking this action would not result in Trustmark overpaying for results or under-rewarding accomplishments achieved during the year.
The following table shows the relevant performance goals established for 20152022 under the management incentive plan and the extent to which such goals were achieved:
Performance Goals | 2015 Profit Plan Targets | 2015 Results as Approved by the Committee | Percentage of Profit Plan Achieved | Percentage of Payout Achieved | ||||||||||||||||||
($ in millions) | ||||||||||||||||||||||
Corporate Goals (all NEOs): |
| |||||||||||||||||||||
Net income | $ | 116.59 | $ | 116.04 | 99.53 | % | 99 | % | ||||||||||||||
ROATE | 11.73 | % | 11.36 | % | 96.85 | % | 92 | % | ||||||||||||||
Corporate Strategic/Operational Drivers (Host and Greer only): |
| |||||||||||||||||||||
Total revenue | $ | 557.01 | $ | 564.91 | 101.42 | % | 109 | % | ||||||||||||||
(net interest income + non-interest income) | ||||||||||||||||||||||
Non-interest expense | $ | 395.84 | $ | 401.66 | 98.55 | % | 93 | % | ||||||||||||||
Non-performing assets/total loans + ORE | 2.19 | % | 1.81 | % | 120.99 | % | 186 | % | ||||||||||||||
Line of Business Goals (Dewey, Stevens and Tyler only): |
| |||||||||||||||||||||
Corporate Banking, Wealth Management, | ||||||||||||||||||||||
Insurance and Texas Region (Dewey) -- | ||||||||||||||||||||||
Total revenue | $ | 152.51 | $ | 148.92 | 97.65 | % | 92 | % | ||||||||||||||
Non-interest expense | $ | 72.91 | $ | 72.95 | 99.95 | % | 100 | % | ||||||||||||||
Criticized loans/total loans | 6.75 | % | 2.19 | % | 308.22 | % | 200 | % | ||||||||||||||
Net income | $ | 41.01 | $ | 34.79 | 84.84 | % | 62 | % | ||||||||||||||
Retail Banking without Texas Region | ||||||||||||||||||||||
(Stevens) -- | ||||||||||||||||||||||
Total revenue | $ | 294.89 | $ | 301.35 | 102.19 | % | 115 | % | ||||||||||||||
Non-interest expense | $ | 129.25 | $ | 125.70 | 102.82 | % | 128 | % | ||||||||||||||
Criticized loans/total loans | 6.75 | % | 3.18 | % | 212.26 | % | 200 | % | ||||||||||||||
Net income | $ | 55.55 | $ | 58.58 | 105.45 | % | 127 | % | ||||||||||||||
Mortgage Services (Tyler) -- | ||||||||||||||||||||||
Total revenue | $ | 44.91 | $ | 55.09 | 122.67 | % | 200 | % | ||||||||||||||
Non-interest expense | $ | 24.04 | $ | 28.35 | 84.80 | % | 0 | % | ||||||||||||||
Criticized loans/total loans | 6.75 | % | 1.72 | % | 392.44 | % | 200 | % | ||||||||||||||
Net income | $ | 10.73 | $ | 14.81 | 138.00 | % | 200 | % |
Performance Goals | 2022 Targets | 2022 Results as Approved by the Committee | Percentage of Target Level Achieved | |||||||||
($ in millions, other than per share data) | ||||||||||||
Corporate Goal: | ||||||||||||
EPS | $ | 1.94 | $ | 2.41 | 124.23 | % | ||||||
Corporate Strategic/Operational Drivers: | ||||||||||||
Efficiency ratio | 72.96% | 68.97% | 105.79 | % | ||||||||
Non-performing assets/total loans + ORE, excluding PPP loans | 0.70% | 0.55% | 127.27 | % | ||||||||
Non-Interest Expense (Core) | $ | 462.508 | $ | 498.356 | 92.81 | % |
Trustmark’s performance in 2015 resulted in average payouts for the NEOs under the management incentive plan of 116% of the target level. The Committee determined the bonus payments for each NEO by applying the relevant weighting to the achievement of the applicable performance goals for each NEO. The calculated bonus payments align with the strong 2022 financial performance described above. The bonus amounts for the CEO and CFOall NEOs were approved by the Committee and by the Board in January 2016, and the bonus amounts for the other NEOs were approved by the Committee and by the Bank Board inon February 2016.15, 2023. On or about March 15, 2023, Trustmark paidwill pay the following annual cash bonuses for 20152022 performance under the management incentive plan:
Name | Total 2015 Annual Cash ($) | Total Annual Cash Base Salary(2) (%) | 2015 Performance Achieved as (%) | Total 2022 Annual Cash Bonus Paid ($) | Total Annual Cash Bonus Paid as Percentage of Base Salary (1) (%) | 2022 Payment as Percentage of Target (2) (%) | |||||||||||||||||||||||||
Gerard R. Host | $ | 545,091 | 75 | % | 107 | % | |||||||||||||||||||||||||
Louis E. Greer | $ | 172,836 | 48 | % | 107 | % | |||||||||||||||||||||||||
Duane A. Dewey | $ | 146,024 | 42 | % | 93 | % | $ | 1,024,000 | 128.0 | % | 160.0 | % | |||||||||||||||||||
Thomas C. Owens | $ | 320,000 | 80.0 | % | 160.0 | % | |||||||||||||||||||||||||
Robert B. Harvey | $ | 391,680 | 96.0 | % | 160.0 | % | |||||||||||||||||||||||||
Wayne A. Stevens | $ | 186,249 | 56 | % | 124 | % | $ | 321,831 | 80.0 | % | 160.0 | % | |||||||||||||||||||
Breck W. Tyler | $ | 182,345 | 60 | % | 149 | % | |||||||||||||||||||||||||
Granville Tate, Jr. | $ | 391,680 | 96.0 | % | 160.0 | % |
(1) |
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(2) |
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These 20152022 annual cash bonus amounts are presented as Non-Equity Incentive Plan Compensation for 20152022 in the Summary“Summary Compensation Table for 2022” on page 32.30.
Mortgage Production Bonus. In recognition that a quarterly production bonus is very common for executives in mortgage banking and in an effort to remain competitive with Trustmark’s peer companies, Mr. Tyler receives a quarterly production bonus based on the mortgage department’s production, in addition to the annual cash bonus under the management incentive plan. Mr. Tyler’s production bonus is based on a percentage of total mortgage production above a threshold production level each quarter for mortgages that conform to the Bank’s origination guidelines, subject to an annual cap. The specific formula is not publicly disclosed for competitive reasons. Mr. Tyler’s mortgage department production bonus is presented as Non-Equity Incentive Plan Compensation in the Summary Compensation Table on page 32.
Equity-Based Compensation. Trustmark strongly believes that long-term equity-based awards are an integral part of total compensation for NEOs and certain key managers with significant responsibility for Trustmark’s long-term results. Equity-based awards generally constitute the largest non-cash component of each NEO’s total compensation package. In connectionPearl Meyer provides the Committee with peer company data and published surveys to assist the establishmentCommittee in setting the amount of annual equity-based awards. For 2022, Mr. Dewey received an executive strategy committee in 2014, beginning with the 2015 awards, allannual equity-based award tailored to his position as CEO. All other members of the executive strategy committee (other than the CEO) receiveExecutive Strategy Committee received the same size annual equity-based award and all other members of executive management receive the same slightly smaller annual equity-based award. In establishing award levels, the Committee generally does not consider the equity ownership levels of the recipients or prior awards that are fully vested. Equity-based awards and the related performance goals for NEOs under the Amended and Restated Stock Plan are recommended by the Committee and approved by the Board generally at itsduring the first meetingquarter of each year. In 2022, after completing his first year as CEO, Mr. Dewey’s award level was increased by $200,000. All other members of the Executive Strategy Committee received an annual award level increase of $50,000. These increases were made in an effort to align award levels more closely with market practice. Awards are typically made as early as practicable in the year to maximize the time-period for achieving performance goals associated with the awards. The Committee’s meeting schedule is determined several months in advance, soEquity-based awards are granted under the proximity of any grant of awards to earnings announcements or other market events is coincidental.
TheTrustmark Corporation Amended and Restated Stock Plan:and Incentive Compensation Plan (Amended and Restated Stock Plan).
Trustmark’s primary form of equity-based compensation is restricted stock awards. Since 2008, Trustmark has awarded a combination of performance-based restricted stock (67%) and time-based restricted stock (33%) to ensure alignment of executives’ interests with those of shareholders and to align the components of Trustmark’s equity-based compensation with that of its peers and to accomplish Trustmark’s equity award objectives, including executive officer retention and attraction.awards each represented 50% for all NEOs. The Committee believes that performance-based restricted stock provides an effective means of delivering incentive compensation, a reward for achievement of long-term objectives and an effective means of executive retention, with normal vesting not occurring for three years. The Committee also believes that usetime-based equity awards, which have a three-year cliff vesting feature, promote an important goal of time-based restrictedexecutive retention and help encourage greater levels of stock grants, which vestownership by executives, while also having an incentive effect as a result of their value being linked to Trustmark’s stock price. The Committee will review the mix of LTI awards from time to time and make adjustments in three years, provides a balanced retention element against the negative impact of economic issues outside the control of management on the ultimate earning of performance-basedmix as needed to reflect its objectives for such awards.
ThePerformance Awards. Beginning in 2020, performance-based equity awards consist of a dualan award of restricted stock andunits (known as performance units) that also includes the potential to earn an equal number of additional restricted stock units (known as achievement units).
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For performance awards granted in 2022, the performance period began January 1, 2022, and continues through December 31, 2024. Consistent with potential vesting uppast years, the performance units and achievement units vest based on the achievement of company performance goals related to 200%ROATE and TSR over a three-year performance period. The restricted stock vests based on performance overunits vest to the three-year performance period upextent the aggregate vesting percentage ranges from 0% to 100%, and the restricted stockachievement units vest based on performance overto the same three-year performance period exceedingextent the aggregate vesting percentage exceeds 100% (up to a maximum of 200%). To the extent earned, the restricted stockThe performance units and achievement units are settled in unrestricted shares issued afterfollowing the end of the performance period ends.
For 2015, based on analyses from PM&P in reflecting that Trustmark’s long-term equity compensation was generally below the market median for these positions, the Committee recommended and the Corporate Board approved an increase in the value of the award to the members of the executive strategy committee other than Mr. Host (which includes Messrs. Greer, Dewey and Stevens). The goal of these increases was to improve the competitiveness of Trustmark’s long-term equity compensation and overall compensation for these NEOs and create a pay mix that is closer to market practices. In establishing award levels, the Committee generally does not consider the equity ownership levels of the recipients or prior awards that are fully vested.
For the performance-based restricted stock and restricted stock unit awards to be earned, certain performance goals must be achieved within the three-year performance period covered by the awards.period. The executive generally must also remain employed by Trustmark through the end of the performance period for the restricted stockperformance units and restricted stockachievement units to vest fully (to the extent earned). TheDividend equivalents are accumulated on the performance goals are scaled so that the recipient can receive a partial award in the event that acceptable,units, but not the target, results are achieved and so that performanceachievement unit portion of the award. No interest is paid on accumulated dividend equivalents.
As noted above, the target level yields higher awards.
The performance-based restricted stock and restricted stock unit awards granted in 2015 vest based on the achievement of target percentages related to ROATE (50%), with vesting up to and including 100%, and TSR (50%), with vesting up to and including 100%, compared to Trustmark’s peer group. For eachperformance goals of ROATE and TSR the thresholdare measured over a three-year performance level is reached at the 30th percentile compared to the peer group, with 50% vesting occurring at the 50th percentile and 100% vesting occurring at the 75th percentile.period. The performance period began January 1, 2015,target of ROATE is established on the date of grant and continues through December 31, 2017.is based on a forecasted three-year average of ROATE. The performance target of TSR is Trustmark’s TSR ranking as it relates to a defined peer group. The aggregate of the ROATE results and TSR results create a combined attainment.
The threshold, target and maximum levels are shown below for each performance goal as results are calculated and achievement is attained:
Threshold | Target | Maximum | ||||||||||||||||||
Performance Goal | Results | Attainment | Results | Attainment | Results | Attainment | ||||||||||||||
ROATE Performance Level (3-year average - actual to performance target) | 80% | 25.00% | 100% | 50% | 120% | 100% | ||||||||||||||
TSR Ranking (as a percentile compared to Peers) | 30th percentile | 17.50% | 50th percentile | 50% | 75th percentile | 100% | ||||||||||||||
Aggregate Vesting Attained | 42.50% | 100% | 200% |
Prior to 2020, Trustmark granted performance-based equity awards consisting of a dual award of restricted stock portion vests based onand an equal number of achievement units. These awards have attributes similar to those described above.
Time-based Awards.The time-based units granted in 2022 vest 100% at February 16, 2025, if the vesting level achieved with respect to the ROATE and TSR performance in the aggregate up to 100%. If a greater than 100% vesting level with respect to the ROATE and TSR
targets is achieved in the aggregate (with the maximum being 200%) for an executive who remains employed for the entire performance period, thethrough such date (subject to certain exceptions). Dividend equivalents on any time-based restricted stock unit portion of the award will be earned to the extent of such vesting above 100% and settled in shares of unrestricted stock. Any restricted stock units earned will be paid during the first 2 1/2 months of 2018.
In the event of an executive’s death, disability, retirement at or after age 65 with consent of the Committee and where cause for termination is not present, termination by Trustmark without cause, termination by the executive for good reason (if provided in the executive’s employment agreement) or a change in control, partial time-weighted performance vesting occurs based on ROATE and TSR through the end of the calendar quarter prior to such event. Dividends on the restricted stock portion of the award are accumulated and will vest and be paid only when and to the extent the shares to which they relate vest, subject to a six-month delay when required by Section 409A of the Internal Revenue Code. No interest is paid on the accumulated dividends. No dividend equivalents are accumulated on the restricted stock unit portion of the award.
The409A. In 2022, time-based awards granted in 2015 vest 100% at January 27, 2018, if the executive remains employed through such date. Partial time-weighted acceleratedalso provide for additional vesting may occur based on the executive’s death, disability,upon retirement at or after age 65 with the consent of the Committee and where cause for termination is not present, termination by Trustmark without cause, termination byHuman Resources Committee. Retirement of the executive for good reason (if provided in the executive’s employment agreement) or a change in control. Dividends on any time-based restricted stock are accumulated and will vest and be paid only when andprior to the extentfirst anniversary of the shares to which they relate vest,grant date results in vesting of one-third of granted units, and retirement after the first anniversary of the grant date results in full vesting of granted units, in each case subject to a six-month delay when required by Section 409A.
The following table reflects the grant date fair values of the performance-based restricted stockperformance units and restricted stock unit awardsachievement units and time-based restricted stock awardsunits granted to the NEOs in 2015:2022:
Name | Value of ($) | Value of RSUs(1) ($) | Value of ($) | Total ($) | Value of Performance Units ($) | Value of Achievement Units (1) ($) | Value of Time-Based RSUs ($) | Total ($) | ||||||||||||||||||||||||||||||
Gerard R. Host | $ | 437,690 | $ | 56,972 | $ | 215,450 | $ | 710,112 | ||||||||||||||||||||||||||||||
Louis E. Greer | $ | 101,004 | $ | 13,147 | $ | 49,735 | $ | 163,886 |
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Duane A. Dewey | $ | 101,004 | $ | 13,147 | $ | 49,735 | $ | 163,886 | $ | 399,607 | --- | $ | 400,134 | $ | 799,741 | |||||||||||||||||||||||
Thomas C. Owens | $ | 124,902 | --- | $ | 125,034 | $ | 249,936 | |||||||||||||||||||||||||||||||
Robert B. Harvey | $ | 124,902 | --- | $ | 125,034 | $ | 249,936 | |||||||||||||||||||||||||||||||
Wayne A. Stevens | $ | 101,004 | $ | 13,147 | $ | 49,735 | $ | 163,886 | $ | 124,902 | --- | $ | 125,034 | $ | 249,936 | |||||||||||||||||||||||
Breck W. Tyler | $ | 80,803 | $ | 10,518 | $ | 39,788 | $ | 131,109 | ||||||||||||||||||||||||||||||
Granville Tate, Jr. | $ | 124,902 | --- | $ | 125,034 | $ | 249,936 |
(1) |
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The following table reflects the values realized by the NEOs on vesting of performance-based restricted stock awards and time-based restricted stock and RSU awards that vested during 20152022 from grants made in prior years. See the Option“Option Exercises and Stock Vested for 20152022” table on page 3634 for more information.
Name | Value of ($) | Value of Excess ($) | Value of ($) | Total ($) | Value of Performance-Based Shares Vested (1) ($) | Value of Time-Based Shares and RSUs Vested (2) ($) | Total ($) | |||||||||||||||||||||||||
Gerard R. Host | $ | 220,784 | --- | $ | 122,702 | $ | 343,486 | |||||||||||||||||||||||||
Louis E. Greer | $ | 50,327 | --- | $ | 27,985 | $ | 78,312 | |||||||||||||||||||||||||
Duane A. Dewey | $ | 50,327 | --- | $ | 27,985 | $ | 78,312 | $ | 63,617 | $ | 148,986 | $ | 212,603 | |||||||||||||||||||
Thomas C. Owens | $ | 25,434 | $ | 59,601 | $ | 85,035 | ||||||||||||||||||||||||||
Robert B. Harvey | $ | 42,422 | $ | 99,324 | $ | 141,746 | ||||||||||||||||||||||||||
Wayne A. Stevens | $ | 50,327 | --- | $ | 27,985 | $ | 78,312 | $ | 42,422 | $ | 99,324 | $ | 141,746 | |||||||||||||||||||
Breck W. Tyler | $ | 50,327 | --- | $ | 27,985 | $ | 78,312 | |||||||||||||||||||||||||
Granville Tate, Jr. | $ | 42,422 | $ | 99,324 | $ | 141,746 |
(1) |
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(2) |
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Retirement Benefits.Trustmark maintains severalcertain plans providing retirement benefits in which the NEOs and certain other associates participate, as described below.
Trustmark Capital Accumulation Plan. Trustmark maintains a non-contributory defined benefit plan (Trustmark Capital Accumulation Plan) that provides a “pension equity” benefit for substantially all associates, including NEOs, who were employed prior to January 1, 2007. Retirement benefits under the plan’s pension equity benefit formula are based on the length of credited service and final average compensation, as defined in the plan, through May 15, 2009, and vest upon three years of service. The pension equity benefit is paid after cessation of employment (unless the participant decides to delay payment to the normal retirement age of 65) as a lump sum or as a life annuity based on the plan’s actuarial conversion factors, as selected by the participant.
Benefits payable under the plan are based on a pension equity formula that takes into account the participant’s compensation through May 15, 2009, averaged over the highest consecutive five-year period out of the most recent seven-year period, the number of years of credited service and the age when each year of credited service was earned through May 15, 2009. Compensation consists of W-2 taxable income adjusted for associate contributions to Trustmark’s 401(k) plan, qualified transportation fringe benefits and cafeteria plans. Compensation does not include group term life insurance, automobile allowance, moving expenses, severance pay or income from stock options after 2002. After 2003, compensation also excludes all incentive compensation, bonuses and commissions, with exceptions for associates whose pay is 100% commission-based.
In an effort to control expenses, participation and benefit accrual under the plan were frozen as of May 15, 2009 (except for certain grandfathered participants, none of whom are NEOs), so that individual pension amounts under the plan are not increased for compensation or service after May 15, 2009 (other than for the grandfathered participants). This freeze applied to all NEOs for 2015. After May 15, 2009, the pension equity lump sum credit balance of each NEO is increased only for interest credited under IRS regulations (but only until the plan benefit commences to be paid).
For 2015, the maximum annual benefit allowable by tax law under the plan was $210,000. Amounts payable pursuant to the plan are not subject to reduction for social security benefits.
See the Pension Benefits for 2015 table on page 37 for more information regarding this plan.
Executive Deferral Plan.Plan. Because of the limits for tax qualified retirement plans, Trustmark also maintains a defined benefit supplemental retirement plan (Executive Deferral Plan) that provides additional retirement benefits to selected executives. TheWhile the Committee believes that the plan isprovided a competitive with Trustmark’selement and was a traditional component among peer financial institutions and is an importantas a tool in attracting andfor retaining executive management. management, the Committee has not recommended adding new participants to the plan since 2008. As a result, Mr. Tate and Mr. Owens, who joined the company after that time, are not participants.
NEOs selected for plan participation by the Committee receive retirement benefits generally equal to 50% of their covered salaries. The retirement benefit is payable for life, but not less than 10ten years, and commences at normal retirement age, which is the attainment of age 65, whether or not the participant is still employed, unless the early retirement or death provisions described below apply. Benefits payable pursuant to the plan are not subject to reduction for social security benefits.
The plan provides retirement and pre-retirement death benefits based upon a retirement benefit amount for each participant established by the Committee. The retirement benefit amount is based on the participant’s level of responsibilities and, in part, on his specified covered salary.
The following table shows, as to each NEO, annual retirement benefits currently anticipated to be paid at normal retirement:
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Name | Annual Benefit ($) | |||||
Duane A. Dewey | $ | 100,000 | ||||
Thomas C. Owens | --- | |||||
Robert B. Harvey | $ | 100,000 | ||||
Wayne A. Stevens | $ | 100,000 | ||||
Granville Tate, Jr. | --- |
The plan permits early retirement at or after age 55 with five years of plan participation. Benefits at early retirement are actuarially reduced. The plan also provides a deferred vested benefit payable at normal retirement age to a participant terminating for reasons other than retirement with at least one year of plan participation or retiring early with a pre-existing election to be paid commencing at his or her normal retirement date. Normally, the deferred benefit is accrued and vests at the rate of 1/10th of the anticipated normal retirement benefit for each year of plan participation for a maximum of 10ten years. However, certain incremental increases vest over the time period ending in the year the participant reaches age 64. If a participant does not complete at least one year of plan participation, plan benefits are forfeited (except where the cessation of employment is due to death, retirement, total disability or just cause as defined in the plan). Should a participant die prior to retirement and prior to when the participant’s retirement benefit commences to be paid, the participant’s beneficiary will receive a death benefit equal to a percentage (100% for the first year and 75% for the remaining years) of a specified covered salary amount (which amount is twice the anticipated normal retirement benefit) for ten years or until the participant would have reached normal retirement age, whichever is later. Life insurance contracts have been purchased to fund payments under the plan.
See the Pension“Pension Benefits for 20152022” table on page 3734 for more information regarding this plan.
Non-Qualified Deferred Compensation Plan.Plan.Trustmark also provides a non-qualified deferred compensation planNon-Qualified Deferred Compensation Plan (the NQDC Plan) that provides additional cash compensation deferral opportunities for executives who may beare impacted by the compensation and contribution limits that restrict participation in theTrustmark’s 401(k) plan. The Committee believes the plan is competitive with those offered by Trustmark’s peer financial institutions and is an important tool in attracting and retaining executive management. The plan allows executives, including NEOs, to defer on a pre-tax basis up to 90% of annual base salary and/or cash bonus. No contribution is madeThe NQDC Plan was amended in 2022 to permit discretionary contributions by Trustmark, and in March 2023 Trustmark contributed an aggregate amount of $124,559 to the plan by Trustmark.CEO’s and other NEOs’ accounts. The contributions in respect of 2022 were based on Trustmark’s performance in 2022 and took into account the Stanford settlement. Each executive’s deferred income is credited to an account, which is
deemed invested in and mirrors the performance of one or more designated
27
investment funds available under the plan and selected at the option of the executive. Distributions can be received under this plan upon retirement, death, long-term disability, termination of employment or during employment at specified dates.
In 2021 and 2022, Mr. Dewey had a scheduled distribution from the NQDC Plan. However, the plan provides that any distribution shall be delayed if such distribution would not be deductible under Section 162(m) of the Internal Revenue Code. As a result, the scheduled distributions to Mr. Dewey for 2021 and 2022 were delayed.
See the “Non-Qualified Deferred Compensation for 20152022” table on page 3735 for more information regarding this plan.plan and see the “Summary Compensation Table for 2022” on page 30 and the “All Other Compensation for 2022” table on page 31 for more information regarding Trustmark’s contribution to Trustmark’s 401(k) Plan.
Perquisites; Other Compensation.Benefits.Perquisites provided to each NEOexecutive officers are reviewed annually within the context of Trustmark’s executive compensation program, market practices and the nature of each NEO’sexecutive’s responsibilities. Generally, Trustmark limits the types of perquisites offered to NEOsexecutive officers as shown in the All“All Other Compensation for 20152022” table on page 33. In addition31.
The Committee believes the currently-offered perquisites are minimal in overall cost and competitively necessary to the cashattract and equity compensation and supplemental retirement benefits described above, NEOs are eligible to participate in the same benefit plans available to all other salaried associates. These include:
retain talented executives. Consistent with most other financial institutions in its peer group, Trustmark encourages executive management to belong to a golf or social club so that there is an appropriate entertainment forum for customers and appropriate interaction with the executives’ communities. Trustmark pays the initiation fee and annual dues for a club membership for some of the NEOs. In addition, Trustmark provides Mr. HostMessrs. Dewey and Stevens with use of a company-owned automobile, as it does for Mr. Stevens, due to his responsibilities, which require him to travel frequently between various Trustmark offices and branch locations. Messrs. Host and Stevens also use these automobiles for personal transportation. Relocation benefits are also provided and individually negotiated.
The Committee believes the currently-offered perquisites are minimal in overall cost and competitively necessary to attract and retain talented executives. As the needs of Trustmark and the responsibilities of the NEOs change, the Committee may consider offering different or additional perquisites as appropriate to support Trustmark’s business and attract and retain talented executives. For example, in January 2013,automobile. In addition, the Board authorizedauthorizes an annual allowance of up to 1510 hours of personal use of Trustmark’s airplane for the CEO. The Committee approved this perquisite as both a competitive attraction and retention tool and to provideCEO, which provides an efficient way to minimize travel time commitments formaximize the CEO and maximize hisCEO’s available time for company business.
Severance and Change in Control Benefits.Upon any termination of employment, the executivesNEOs would be entitled to receive their vested benefits under the 401(k) plan, pension plan (Trustmark Capital Accumulation Plan), non-qualified deferred compensation plan (NQDC Plan)NQDC Plan and supplemental retirement plan (Executive Deferral Plan), although these benefits generally would not be increased or accelerated (except for the acceleration of additional years of service provided under the Executive Deferral Plan under certain circumstances).
Trustmark believes that additional severance benefits are appropriate for executive management because it may be difficult for senior executives to find comparable employment within a short period of time. As discussed above, Trustmark’s restricted stock and restricted stock unit awards provide for accelerated vesting upon a change in control and upon certain termination events, and an incremental benefit is provided under the Executive Deferral Plan upon certain termination events following a change in control.
In light of the CEO’s and other NEOs’ role and importance to the success of Trustmark, the Committee believes that it is appropriate to provide for severance and change in control benefits in a written agreement. Mr. Host’s employment agreement with Trustmark is described below. In addition, in light of the important role of executive management to the success of Trustmark, theagreements. The Committee further believes that providing change in control benefits to the CEO and other members of executive managementNEOs should eliminate or at least reduce, any reluctance to pursue potential change in control transactions that may be in the best interests of shareholders. The NEOs’ change in control agreements with Trustmark are described below. Trustmarkalso believes that the severance and change in control benefits it provides are customary among its peers and that the potential cost of these benefits is relatively minor relative to Trustmark’s overall value.peers.
With the exception of the accelerated vesting of restricted stock and restricted stock unit awards, Trustmark’s change in control benefits provided to the CEO and other members of executive managementNEOs are generally “double trigger,” which means that the benefits are payable only if the executive’s employment is terminated other than for cause, death or disability or if the executive resigns for good reason, in each case within a specified period following a change in control. Trustmark believes that these benefits are consistent with the general practice among its peers. In addition, Trustmark believes the use of a double trigger in most cases reasonably balances the needs of the executive and Trustmark by protecting the legitimate interests of executives in employment security without unduly burdening Trustmark or shareholder value.
Trustmark does not provide any tax gross-ups related to severance or other compensation or benefits that executives may receive in connection with a change in control. Change in control benefits are provided on a “best net” approach, under which an executive’s change in control benefits are reduced to avoid the golden parachute excise tax only if such a reduction would cause the executive to receive more after-tax compensation than without a reduction.
For additional information on Trustmark’s employment and change in control agreements with its NEOs, please see “Employment and Change in Control Agreements with NEOs” beginning on page 40.
Deductibility of Compensation.In making compensation decisions, the Committee considers Section 162(m) of the Internal Revenue Code, which limits the tax deductibility of certain compensation in excess of $1 million paid to Trustmark’s NEOs.
Although tax deductibility continues to be a consideration when determining executive compensation levels, the Committee believes that factors other than tax deductibility should take precedence in certain situations. Given the competitive market for outstanding executives, for example, the Committee believes that it is important to retain the flexibility to determine compensation elements consistent with Trustmark’s compensation philosophy, even if some executive compensation is not fully deductible under Section 162(m). Accordingly, the Committee does approve elements of compensation for certain executives that are not fully deductible by Trustmark and reserves the right to do so in the future when appropriate. In 2022, a portion of Mr. Dewey’s compensation was not deductible by Trustmark under Section 162(m).
Policy Against Hedging and Limitations on Pledging.To ensure that Trustmark directors, officers and employees bear the full risks of stock ownership, Trustmark’s Insider Trading Policy prohibits Trustmark directors, officers and employees from engaging in any form of hedging transactions relating to Trustmark stock. With limited exceptions, directors and executive
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officers are also prohibited from pledging or creating a security interest in any Trustmark stock they hold, and no director or executive officer currently holds any Trustmark stock that is pledged or otherwise subject to a security interest.
Stock Ownership Guidelines.To help mitigate risks associated with Trustmark’s compensation programs and encourage management to focus on long-term growth and financial success, Trustmark has guidelines that require the CEO and other members of executive management of the Bank to own, at minimum, the number of shares of Trustmark stock equal in value to a multiple of their base salary.
The guidelines as of January 1, 2023 are as follows:
Multiple of Base Salary | ||
CEO | 5x | |
Executive Strategy Committee | 2x | |
Other Executive Management | 1.5x |
The guidelines calculate the number of shares to be owned by reference to an executive’s base salary as of March 1 of each year and the 10-day trading average share price through March 31 each year. Shares of unvested time-based restricted stock are counted as shares owned for purposes of the guidelines. Pledged shares are not considered to be owned for purposes of the stock ownership guidelines. The Human Resources Committee reviews stock ownership levels of executive management annually. Until an executive has reached the applicable ownership level, the executive is required to hold 100% of the shares received from any Trustmark stock awards. Based on the most recent review of ownership level attainment in 2022, Messrs. Harvey, Stevens and Tate owned the minimum number of shares required to satisfy the guidelines. Messrs. Dewey and Owens are expected to satisfy the stock ownership guidelines, over time.
Executive Compensation Recoupment.Since 2011, the Committee has included clawback provisions in performance awards and the management incentive plan with respect to annual cash bonuses that may be earned under the plan. Under these provisions, any performance awards or restricted stock unit award that vests or cash bonus paid is subject to recovery by Trustmark as required by applicable federal law and/or such basis as the Board determines. The Committee anticipates adopting a comprehensive executive clawback policy following approval of final rules and Nasdaq listing standards implementing the clawback requirements under the Dodd-Frank Act.
Analysis of Risk Associated with Trustmark’s Compensation Policies and Practices. In late 2022 and early 2023, the Committee, together with Trustmark’s risk and human resources officers, conducted an in-depth risk assessment of Trustmark’s compensation policies and practices. Management prepared detailed materials regarding the operation of Trustmark’s various compensation arrangements with its associates and submitted the materials to Trustmark’s risk officers, who reviewed the materials with the members of management most closely involved with the respective compensation arrangements. Trustmark’s risk officers identified the key enterprise risks to which Trustmark is subject, including credit, liquidity, market/interest rate, compliance, operational, technology, strategic, reputational and other risks, and focused their review on the compensation arrangements most likely to implicate those risks. Trustmark’s Chief Administrative Officer presented the risk officers’ conclusions and supporting materials to the Committee, which reviewed and discussed the analysis at its meeting on February 14, 2023.
The Committee has concluded that Trustmark’s compensation policies and practices have sufficient mitigating features and controls to maintain an appropriate balance between prudent business risk and resulting compensation and encourage appropriate risk behavior consistent with Trustmark’s risk appetite, business strategy and profit goals. Some of the mitigating features and controls used are the overall compensation mix, weighting of performance metrics, timing of awards in relation to performance measurement period, use of full value equity-based awards with multi-year vesting periods, and establishment of targets with payouts at multiple levels of performance, chargeback provisions on returned or unearned commissions, capped upside opportunities, and oversight by executive management and the Board. In addition, Trustmark’s incentive compensation arrangements are subject to a system of internal controls to ensure that incentive compensation is properly tracked, approved and paid. Trustmark’s internal controls include comparisons throughout the year of performance results against performance requirements, approval by appropriate levels of management, the Committee, the Board and/or the Bank Board of incentive compensation payouts, with separate review and approval by division controllers of lines of business that have significant incentive compensation payouts, and coordination among human resources, accounting, and payroll personnel to ensure that incentive compensation payouts that have been approved are appropriately reconciled to those approvals before and after payment is made. As a result, the Committee concluded that Trustmark’s compensation policies and practices are not reasonably likely to have a material adverse effect on Trustmark, do not encourage imprudent risk-taking behavior and are consistent with maintaining the organization’s safety and soundness.
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Summary Compensation Table for 2022
The following table summarizes the compensation components for each person who served as CEO and CFO during 2022, as well as the next three most highly compensated executive officers during 2022, and indicates their positions as of December 31, 2022. Although considered “officers” of Trustmark Corporation under the Exchange Act, the NEOs’ compensation, except for equity awards under Trustmark’s stock and incentive compensation plans, is paid by the Bank. The amounts reported in the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” column were not paid to the NEOs in any year shown. These amounts represent the annual change in the present value of potential future benefits the NEOs might receive upon retirement, assuming the benefits have vested.
Name and Principal Position
| Year | Salary ($) | Bonus ($) | Stock Awards (2) ($) | Option ($) | Non-Equity Incentive Plan ($) | Change in Qualified ($) | All Other ($) | Total ($) | |||||||||||||||||||||||||||||||||
Duane A. Dewey (7) | 2022 | $ | 783,333 | --- | $ | 799,741 | --- | $1,024,000 | --- | $ 132,205 | $ | 2,739,279 | ||||||||||||||||||||||||||||||
President and Chief Executive Officer, | 2021 | $ | 700,000 | --- | $ | 909,128 | --- | $ 769,720 | --- | $ 93,578 | $ | 2,472,426 | ||||||||||||||||||||||||||||||
Trustmark Corporation and Trustmark National Bank | 2020 | $ | 500,001 | --- | $ | 346,254 | --- | $ 550,950 | $ 210,606 | $ 41,988 | $ | 1,649,799 | ||||||||||||||||||||||||||||||
Thomas C. Owens (8) | 2022 | $ | 393,333 | --- | $ | 249,936 | --- | $ 320,000 | --- | $ 37,748 | $ | 1,001,017 | ||||||||||||||||||||||||||||||
Treasurer and Principal Financial Officer, | 2021 | $ | 350,000 | --- | $ | 305,139 | --- | $ 263,880 | --- | $ 34,933 | $ | 953,952 | ||||||||||||||||||||||||||||||
Trustmark Corporation, Chief Financial Officer, Trustmark National Bank | ||||||||||||||||||||||||||||||||||||||||||
Robert B. Harvey | 2022 | $ | 406,667 | --- | $ | 249,936 | --- | $ 391,680 | --- | $ 27,777 | $ | 1,076,060 | ||||||||||||||||||||||||||||||
Executive Vice President, Chief Credit and Operations Officer, | 2021 | $ | 386,879 | $ | 25,000 | $ | 203,194 | --- | $ 272,253 | --- | $ 26,170 | $ | 913,496 | |||||||||||||||||||||||||||||
Trustmark National Bank | 2020 | $ | 362,950 | $ | 50,000 | $ | 197,882 | --- | $ 308,645 | $ 236,474 | $ 25,709 | $ | 1,181,660 | |||||||||||||||||||||||||||||
Wayne A. Stevens | 2022 | $ | 400,975 | --- | $ | 249,936 | --- | $ 321,831 | --- | $ 48,287 | $ | 1,021,029 | ||||||||||||||||||||||||||||||
President – Retail Banking, Trustmark National Bank | ||||||||||||||||||||||||||||||||||||||||||
Granville Tate, Jr. (9) | 2022 | $ | 406,667 | --- | $ | 249,936 | --- | $ 391,680 | --- | $ 44,348 | $ | 1,092,631 | ||||||||||||||||||||||||||||||
Secretary, Trustmark Corporation | 2021 | $ | 400,000 | --- | $ | 402,911 | --- | $ 351,880 | --- | $ 42,110 | $ | 1,196,901 | ||||||||||||||||||||||||||||||
Executive Vice President, Chief Administrative Officer, and Secretary, Trustmark National Bank |
(1) | The 2021 amount shown for Mr. Harvey is a $25,000 discretionary bonus for his continued management of the Payroll Protection Program. The 2020 amount shown for Mr. Harvey is a $25,000 discretionary bonus for his implementation of CECL, and a $25,000 discretionary bonus for his management of the Payroll Protection Program. All were recommended by the CEO and approved by the Board. |
(2) | The amounts in this column reflect restricted stock and restricted stock unit awards granted to the NEOs during 2022, 2021, and 2020 and are disclosed as the aggregate grant date fair value of the awards, computed in accordance with ASC Topic 718, based, in the case of performance awards, on the then-anticipated outcome and excluding the impact of estimated forfeitures. These awards include performance awards that will vest only if the related performance measures are achieved. For the performance awards granted in 2022, 2021, and 2020, the amounts reported in this column reflect the grant date fair value based on the achievement of less than the maximum performance level. The grant date fair values, based on achievement of the maximum performance level, would be as follows for the awards granted: |
2022 | 2021 | 2020 | ||||||||||
Dewey | $ | 605,980 | $ | 458,873 | $257,291 | |||||||
Owens | $ | 189,406 | $ | 152,958 | --- | |||||||
Harvey | $ | 189,406 | $ | 152,958 | $147,064 | |||||||
Stevens | $ | 189,406 | --- | --- | ||||||||
Tate | $ | 189,406 | $ | 152,958 | --- |
Assumptions used in the calculation of these amounts are included in Note 15 to Trustmark’s audited financial statements for the year ended December 31, 2022, in Trustmark’s Annual Report on Form 10-K filed with the SEC on February 16, 2023.
(3) | No stock option awards were made during 2022, 2021, or 2020. Trustmark does not have any stock options outstanding currently. |
(4) | This column shows the value of annual cash bonuses earned under Trustmark’s management incentive plan. |
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(5) | The amounts shown in the table above reflect the changes in actuarial present value of the NEO’s accumulated benefits under the Executive Deferral Plan, determined using interest rate and mortality rate assumptions consistent with those used in Trustmark’s audited financial statements and exclude amounts which the NEO may not have been entitled to receive because such amounts were not yet vested. In 2022 and 2021, decreases in pension value of the Executive Deferral Plan benefits were largely the result of an increase in the 2022 and 2021 discount rates. In 2020, increases in pension value of the Executive Deferral Plan benefits were largely the result of a decrease in the 2020 discount rate. Messrs. Owens and Tate are not participants in the Executive Deferral Plan. There is no above-market interest or earnings to report with respect to deferred compensation. Positive changes for 2020 are shown in the Summary Compensation Table, and negative changes for 2022 and 2021 in pension values were as follows: |
2022 | 2021 | |||||||
Dewey | $ | (316,075 | ) | $ | (48,182 | ) | ||
Owens | --- | --- | ||||||
Harvey | $ | (286,126 | ) | $ | (8,627 | ) | ||
Stevens | $ | (341,247 | ) | --- | ||||
Tate | --- | --- |
(6) | See the following table for details of all other compensation for 2022. |
(7) | Mr. Dewey became President and CEO of Trustmark and CEO of the Bank effective January 1, 2021. He served as President and Chief Operating Officer of Trustmark National Bank from January 1, 2020 to December 31, 2020. |
(8) | Mr. Owens became Treasurer and Principal Financial Officer of Trustmark and CFO of the Bank effective March 1, 2021. |
(9) | Mr. Tate served as Chief Administrative Officer, General Counsel, Chief Risk Officer and Secretary of the Bank until November 22, 2021, when he became Chief Administrative Officer, General Counsel and Secretary of the Bank. Effective December 1, 2021, Mr. Tate became the Chief Administrative Officer and Secretary of the Bank and continued as Secretary of Trustmark. |
All Other Compensation for 2022
The detail of all other compensation for 2022 is included in the following table:
Name | Use of Company Airplane (1) ($) | Automobile Allowance/Use of Company- Automobile (2) ($) | Dividends on Stock (3) ($) | Club Dues ($) | 401(k) Match ($) | Total ($) | ||||||||||||||||||
Duane A. Dewey | $ 51,422 | $ 17,796 | $ 35,771 | $ 8,916 | $ | 18,300 | $ | 132,205 | ||||||||||||||||
Thomas C. Owens | --- | --- | $ 11,334 | $ 8,114 | $ | 18,300 | $ | 37,748 | ||||||||||||||||
Robert B. Harvey | --- | --- | $ 9,477 | $ --- | $ | 18,300 | $ | 27,777 | ||||||||||||||||
Wayne A. Stevens | --- | $ 11,090 | $ 9,477 | $ 9,420 | $ | 18,300 | $ | 48,287 | ||||||||||||||||
Granville Tate, Jr. | --- | --- | $ 16,272 | $ 9,776 | $ | 18,300 | $ | 44,348 |
(1) | The aggregate incremental cost of Mr. Dewey’s personal use of the company airplane is calculated based on the annual cost of operating the company airplane. Operating costs include depreciation, fuel, maintenance, insurance, flight crew expenses (including pilot salaries), landing fees and hangar expenses, and other miscellaneous expenses. Total annual operating costs are divided by the total number of hours the company airplane was used during the year to determine the average operating cost per hour. The average operating cost per hour is then multiplied by the hours Mr. Dewey used the company airplane for personal use to determine Trustmark’s aggregate incremental cost. |
(2) | The aggregate incremental cost of Messrs. Dewey and Stevens’ personal use of a company-owned automobile is calculated based on the annual cost to Trustmark to own and operate each automobile (taking into account depreciation, insurance, taxes, repairs, maintenance and fuel) multiplied by the percentage that Messrs. Dewey and Stevens used the automobile for personal rather than business travel. |
(3) | The amounts in this column reflect the dividends credited to shares of unvested time-based restricted stock held by the NEOs on each dividend payment date during 2022. These dividends are accumulated and will vest and be paid only when and to the extent the related restricted shares vest, subject to a six-month delay when required by Section 409A. |
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Grants of Plan-Based Awards for 2022
The following table presents information regarding incentive-based cash bonuses and equity awards granted to the NEOs during or for the year ended December 31, 2022, under Trustmark’s annual management incentive plan (cash), and Amended and Restated Stock Plan (restricted stock/restricted stock units) and, in the case of incentive-based awards, reflects the amounts that could be earned or received under such awards:
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Stock Awards: Number Shares Stock or | All Other Option Awards: Number of Securities | Exercise or Base | Grant Date Fair Value of Stock and Option | |||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Units (#) | Underlying (#) | Option ($/Sh) | Awards ($) | |||||||||||||||||||||||||||||
Duane A. Dewey | $ 320,000 | $ 640,000 | $ 1,280,000 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||
2/16/2022 | --- | --- | --- | 2,143 | 12,244 | 24,488 | --- | --- | --- | $ | 399,607 | |||||||||||||||||||||||||||||
2/16/2022 | --- | --- | --- | --- | --- | --- | 12,244 | --- | --- | $ | 400,134 | |||||||||||||||||||||||||||||
Thomas C. Owens | $ 100,000 | $ 200,000 | $ 400,000 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||
2/16/2022 | --- | --- | --- | 670 | 3,827 | 7,654 | --- | --- | --- | $ | 124,902 | |||||||||||||||||||||||||||||
2/16/2022 | --- | --- | --- | --- | --- | --- | 3,826 | --- | --- | $ | 125,034 | |||||||||||||||||||||||||||||
Robert B. Harvey | $ 122,400 | $ 244,800 | $ 489,600 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||
2/16/2022 | --- | --- | --- | 670 | 3,827 | 7,654 | --- | $ | 124,902 | |||||||||||||||||||||||||||||||
2/16/2022 | --- | --- | --- | --- | --- | --- | 3,826 | --- | --- | $ | 125,034 | |||||||||||||||||||||||||||||
Wayne A. Stevens | $ 100,573 | $ 201,145 | $ 402,290 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||
2/16/2022 | --- | --- | --- | 670 | 3,827 | 7,654 | --- | --- | --- | $ | 124,902 | |||||||||||||||||||||||||||||
2/16/2022 | --- | --- | --- | --- | --- | --- | 3,826 | --- | --- | $ | 125,034 | |||||||||||||||||||||||||||||
Granville Tate, Jr. | $ 122,400 | $ 244,800 | $ 489,600 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||
2/16/2022 | --- | --- | --- | 670 | 3,827 | 7,654 | --- | --- | --- | $ | 124,902 | |||||||||||||||||||||||||||||
2/16/2022 | --- | --- | --- | --- | --- | --- | 3,826 | --- | --- | $ | 125,034 |
(1) | The amounts shown in these columns reflect possible payouts under the annual management incentive plan for 2022. The minimum possible payment level (threshold) was 50% of the target amount shown, and the maximum possible payment was 200% of the target. All of these amounts are percentages of the executive’s base salary as of March 1, 2022. The amount of the award actually earned by the NEOs was recommended by the Committee on February 14, 2023 and approved by the Board on February 15, 2023. Amounts actually earned for 2022 are reported as Non-Equity Incentive Plan Compensation in the “Summary Compensation Table for 2022” on page 30. |
(2) | Reflects the performance-based restricted stock and restricted stock unit awards granted on February 16, 2022. For a description of the vesting conditions and other features of the performance-based restricted stock and restricted stock unit awards, please see “Equity-Based Compensation” beginning on page 25. |
(3) | Reflects the number of shares of time-based restricted stock granted on February 16, 2022. For a description of the vesting conditions and other features of the time-based restricted stock, please see “Equity-Based Compensation” beginning on page 25. |
(4) | The amounts in this column reflect the grant date fair value of the performance-based restricted stock and restricted stock unit awards computed in accordance with ASC Topic 718, in each case based on the then-anticipated outcome and the grant date fair value of the time-based restricted stock computed in accordance with ASC Topic 718. |
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Outstanding Equity Awards at 2022 Fiscal Year-End
The following table presents information regarding unvested equity awards held by NEOs at December 31, 2022. All awards in the table below were granted under the Amended and Restated Stock Plan. None of the NEOs held any unexercised options at December 31, 2022.
Stock Awards | ||||||||||||||||||
Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (1) (#) | Market Value of Shares or Units of Stock That Have Not Vested (2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (1) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (2) ($) | |||||||||||||
Duane A. Dewey | 2/19/2020 (3) | 5,413 | 188,968 | --- | --- | |||||||||||||
2/19/2020 (4) | --- | --- | 5,129 | 179,053 | ||||||||||||||
1/4/2021 (3) | 11,079 | 386,768 | --- | --- | ||||||||||||||
2/17/2021 (3) | 10,145 | 354,162 | --- | --- | ||||||||||||||
2/17/2021 (5) | --- | --- | 10,146 | 354,197 | ||||||||||||||
2/16/2022 (3) | 12,244 | 427,438 | --- | --- | ||||||||||||||
2/16/2022 (6) | --- | --- | 12,244 | 427,438 | ||||||||||||||
38,881 | $ | 1,357,336 | 27,519 | $ | 960,688 | |||||||||||||
Thomas C. Owens | 2/19/2020 (3) | 1,856 | 64,793 | --- | --- | |||||||||||||
2/19/2020 (4) | --- | --- | 1,759 | 61,407 | ||||||||||||||
2/17/2021 (3) | 3,382 | 118,066 | --- | --- | ||||||||||||||
2/17/2021 (5) | --- | --- | 3,382 | 118,066 | ||||||||||||||
3/1/2021 (3) | 3,256 | 113,667 | --- | --- | ||||||||||||||
2/16/2022 (3) | 3,826 | 133,566 | --- | --- | ||||||||||||||
2/16/2022 (6) | --- | --- | 3,827 | 133,601 | ||||||||||||||
12,320 | $ | 430,092 | 8,968 | $ | 313,074 | |||||||||||||
Robert B. Harvey | 2/19/2020 (3) | 3,093 | 107,977 | --- | --- | |||||||||||||
2/19/2020 (4) | --- | --- | 2,932 | 102,356 | ||||||||||||||
2/17/2021 (3) | 3,382 | 118,066 | --- | --- | ||||||||||||||
2/17/2021 (5) | 3,382 | 118,066 | ||||||||||||||||
2/16/2022 (3) | 3,826 | 133,566 | --- | --- | ||||||||||||||
2/16/2022 (6) | --- | --- | 3,827 | 133,601 | ||||||||||||||
10,301 | $ | 359,609 | 10,141 | $ | 354,023 | |||||||||||||
Wayne A. Stevens | 2/19/2020 (3) | 3,093 | 107,977 | --- | --- | |||||||||||||
2/19/2020 (4) | --- | --- | 2,932 | 102,356 | ||||||||||||||
2/17/2021 (3) | 3,382 | 118,066 | --- | --- | ||||||||||||||
2/17/2021 (5) | --- | --- | 3,382 | 118,066 | ||||||||||||||
2/16/2022 (3) | 3,826 | 133,566 | --- | --- | ||||||||||||||
2/16/2022 (6) | --- | --- | 3,827 | 133,601 | ||||||||||||||
10,301 | $ | 359,609 | 10,141 | $ | 354,023 | |||||||||||||
Granville Tate, Jr. | 2/19/2020 (3) | 3,093 | 107,977 | --- | --- | |||||||||||||
2/19/2020 (4) | --- | --- | 2,932 | 102,356 | ||||||||||||||
1/4/2021 (3) | 7,386 | 257,845 | --- | --- | ||||||||||||||
2/17/2021 (3) | 3,382 | 118,066 | --- | --- | ||||||||||||||
2/17/2021 (5) | --- | --- | 3,382 | 118,066 | ||||||||||||||
2/16/2022 (3) | 3,826 | 133,566 | --- | --- | ||||||||||||||
2/16/2022 (6) | --- | --- | 3,827 | 133,601 | ||||||||||||||
17,687 | $ | 617,454 | 10,141 | $ | 354,023 |
(1) | Dividends on the restricted shares are accumulated, vest and are paid only when and to the extent the underlying restricted shares vest, subject to a six-month delay when required by Section 409A. No interest is paid on accumulated dividends. No dividend equivalents are accumulated on the achievement units over 100% vesting of performance restricted stock. Accelerated vesting of these shares and units may occur based on the executive’s death, disability, retirement at or after age 65 with consent of the Committee and where cause for termination is not present, termination by Trustmark without cause, termination by the executive for good reason if provided in the executive’s employment agreement or a change in control. |
(2) | The market value of shares or units that have not vested is the number of reported shares or units, as applicable, multiplied by the closing market price of Trustmark’s common stock on December 31, 2022 which was $34.91 per share. |
(3) | Reflects time-based restricted stock granted, which vests 100% on the third anniversary of the grant date, if the executive remains employed through such date. See footnote (1) above for information regarding dividend accumulation and the events that may trigger partial time-weighted accelerated vesting with respect to these shares. |
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(4) | For awards granted on February 19, 2020, reflects the number of performance units that vested under the award on February 14, 2023. The vesting percentages of the performance units and potential achievement units are based on performance goals of a three-year average of Trustmark’s ROATCE compared to a target level and TSR which is compared to a defined peer group. Because of the achievement of a performance-based vesting level with respect to the ROATCE and TSR targets of less than 100% in the aggregate (94.75% out of a maximum of 200%), no additional achievement units were issued. Also see footnote (1) above for information regarding dividend accumulation on the restricted shares. |
(5) | For awards granted on February 17, 2021, reflects the target (100%) number of performance units granted. The awards vest over a January 1, 2021, through December 31, 2023, performance period. For a description of the vesting conditions and other features of the performance units and potential achievement units, please see “Equity-Based Compensation” beginning on page 25. Also see footnote (1) above for information regarding dividend accumulation on the restricted shares and the events that may trigger partial time-weighted performance vesting. |
(6) | For awards granted on February 16, 2022 reflects the target (100%) number of performance units granted. The awards vest over a January 1, 2022, through December 31, 2024, performance period. For a description of the vesting conditions and other features of the performance units and potential achievement units, please see “Equity-Based Compensation” beginning on page 25. Also see footnote (1) above for information regarding dividend accumulation on the restricted shares and the events that may trigger partial time-weighted performance vesting. |
Option Exercises and Stock Vested for 2022
The following table presents information regarding restricted stock that vested during 2022 for each of the NEOs. None of the NEOs held or exercised options during 2022.
Stock Awards | ||||||||||
Name | Number of Shares Acquired on Vesting (1) (#) |
| Value Realized on Vesting (2) ($) |
| ||||||
Duane A. Dewey | 6,523 | $ | 212,603 | |||||||
Thomas C. Owens | 2,609 | $ | 85,035 | |||||||
Robert B. Harvey | 4,349 | $ | 141,746 | |||||||
Wayne A. Stevens | 4,349 | $ | 141,746 | |||||||
Granville Tate, Jr. | 4,349 | $ | 141,746 |
(1) | Represents the total number of restricted shares that vested during 2022, without taking into account any shares that were surrendered or withheld for applicable tax obligations. |
(2) | Value realized is the gross number of shares multiplied by the market price of Trustmark’s common stock on the date of vesting. |
Pension Benefits for 2022
The Executive Deferral Plan is discussed in more detail under “Executive Deferral Plan” on page 27.
The following table shows the present value at December 31, 2022, of accumulated benefits payable to each NEO, including the number of years of service credited, under the Executive Deferral Plan, determined using interest rate and mortality rate assumptions included in Note 14 to Trustmark’s audited financial statements for the year ended December 31, 2022, in Trustmark’s Annual Report on Form 10-K filed with the SEC on February 16, 2023.
Name | Plan Name | Number of Years Credited Service (1) (#) | Present Value of Accumulated Benefit (2)(3) ($) | Payments During Last Fiscal Year ($) | ||||
Duane A. Dewey | Executive Deferral Plan | 19 | $ 1,220,573 | --- | ||||
Thomas C. Owens | Executive Deferral Plan | --- | --- | --- | ||||
Robert B. Harvey | Executive Deferral Plan | 17 | $ 1,127,865 | --- | ||||
Wayne A. Stevens | Executive Deferral Plan | 19 | $ 856,104 | --- | ||||
Granville Tate, Jr. | Executive Deferral Plan | --- | --- | --- |
(1) | This column reflects years of participation in the Executive Deferral Plan. Benefits accrue during a specified vesting period, which may be less that the years of credited service shown above. |
(2) | Excludes amounts under the Executive Deferral Plan which Messrs. Harvey and Stevens would not currently be entitled to receive because such amounts are not vested. In connection with a previous increase in annual retirement benefits, they become vested in the increased amount over time through the year they attain age 64. |
(3) | The present value of accumulated benefit is the discounted value of the vested annual benefit payable at retirement age as of December 31, 2022. |
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Non-Qualified Deferred Compensation for 2022
The NQDC Plan is discussed in more detail under “Non-Qualified Deferred Compensation Plan” on page 27. The following table presents information relating to each NEO’s participation in the plan:
Name | Executive Contributions in Last Fiscal Year (1) ($) | Trustmark Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year (2) ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End (3) ($) | |||||||||||
Duane A. Dewey | $ | 123,972 | --- | $ | (89,708 | ) | --- | $ | 552,847 | |||||||
Thomas C. Owens | --- | --- | --- | --- | --- | |||||||||||
Robert B. Harvey | --- | --- | $ | (239,693 | ) | --- | $ | 685,411 | ||||||||
Wayne A. Stevens | $ | 68,833 | --- | $ | (71,864 | ) | --- | $ | 434,316 | |||||||
Granville Tate, Jr. | --- | --- | $ | (84,006 | ) | --- | $ | 463,248 |
(1) | These amounts are included in the “Summary Compensation Table for 2022” on page 30. |
(2) | The amounts in this column consist of investment gains and losses for 2022 and do not include any above-market earnings. |
(3) | Of the amounts disclosed in this column, the following amounts were previously reported as compensation to the NEO in a summary compensation table prior to 2022: Dewey -- $375,026 and Stevens -- $183,884. |
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Potential Payments Upon Termination or Change in Control
The following table describes the potential payments that would be made to each of the NEOs in various termination and change in control scenarios based on compensation, benefit and equity levels in effect on December 31, 2022. The amounts shown are estimates and assume that the termination or change in control event occurred on December 31, 2022. The actual amounts to be paid can only be determined at the time of an NEO’s actual termination of employment or an actual change in control of Trustmark.
In accordance with SEC regulations, the following table does not report any amount to be provided to an NEO that does not discriminate in scope, terms or operation in favor of Trustmark’s executive officers and which is available generally to all salaried employees, and excludes (i) amounts accrued through December 31, 2022, that would be paid in the normal course of continued employment, such as accrued but unpaid salary and bonus amounts, (ii) vested account balances under the Executive Deferral Plan, NQDC Plan and 401(k) plan, and (iii) already vested equity awards.
The amounts shown for Mr. Dewey in the table below are determined based on his employment agreement in effect as of December 31, 2022, and references to such agreement in the footnotes below refer to the agreement in effect as of December 31, 2022. For a description of his employment agreement, please see “Employment and Change in Control Agreements with NEOs” beginning on page 40.
Name | Incremental Compensation and Benefit Payments | Non-CIC Termination by Company Without Cause or by Executive for Good Reason under Agreement | CIC Termination by Company Without Cause or by Executive for Good Reason under Agreement (1) | |||||||
Duane A. Dewey (2) | Severance (3) | --- | $ | 1,328,858 | ||||||
Covenant Payment (3) | $ | 2,657,716 | 2,657,716 | |||||||
Restricted Stock -- Accelerated Vesting (4) | 1,440,725 | 2,021,336 | ||||||||
Executive Deferral Plan (5)(6) | --- | --- | ||||||||
Health & Welfare Benefits (7) | 70,752 | 106,128 | ||||||||
Totals | $ | 4,169,193 | $ | 6,114,038 | ||||||
Thomas C. Owens | Severance (3) | --- | $ | 1,267,310 | ||||||
Covenant Payment | --- | --- | ||||||||
Restricted Stock -- Accelerated Vesting (4) | $ | 460,971 | 649,454 | |||||||
Executive Deferral Plan (6) | --- | --- | ||||||||
Health & Welfare Benefits (7) | --- | 36,420 | ||||||||
Totals | $ | 460,971 | $ | 1,953,184 | ||||||
Robert B. Harvey | Severance (3) | --- | $ | 1,421,898 | ||||||
Covenant Payment | --- | --- | ||||||||
Restricted Stock -- Accelerated Vesting (4) | $ | 479,791 | 623,029 | |||||||
Executive Deferral Plan (5)(6) | --- | 32,227 | ||||||||
Health & Welfare Benefits (7) | --- | 36,438 | ||||||||
Totals | $ | 479,791 | $ | 2,113,592 | ||||||
Wayne A. Stevens | Severance (3) | --- | $ | 1,392,042 | ||||||
Covenant Payment | --- | --- | ||||||||
Restricted Stock -- Accelerated Vesting (4) | $ | 479,791 | 623,029 | |||||||
Executive Deferral Plan (5)(6) | --- | 79,266 | ||||||||
Health & Welfare Benefits (7) | --- | 47,984 | ||||||||
Totals | $ | 479,791 | $ | 2,142,321 | ||||||
Granville Tate, Jr. | Severance (3) | --- | $ | 1,485,730 | ||||||
Covenant Payment | --- | --- | ||||||||
Restricted Stock -- Accelerated Vesting (4) | $ | 660,748 | 894,464 | |||||||
Executive Deferral Plan (6) | --- | --- | ||||||||
Health & Welfare Benefits (7) | --- | 38,835 | ||||||||
Totals | $ | 660,748 | $ | 2,419,029 |
(1) | Mr. Dewey’s employment agreement and the other NEOs’ change in control agreements provide for change in control benefits on a “best net” approach, under which the executive’s change in control benefits will be reduced to avoid the golden parachute excise tax under Section 280G of the Internal Revenue Code only if such a reduction would cause the executive to receive more after-tax compensation than without a reduction. The amounts shown in this column do not reflect any reduction that might be made in this regard. |
(2) | If during the term of his employment agreement, Mr. Dewey’s employment is terminated due to disability or if he dies, he or his designated beneficiary, spouse or estate will be entitled to a lump sum payment of a time-weighted pro-rata share of his annual bonus target amount for that year ($640,000 for 2022), in addition to accrued but unpaid compensation to date of termination. |
(3) | The executive must sign a general release in order to be entitled to receive these amounts. In the case of the NEOs other than Mr. Dewey, Trustmark has the right to retain these amounts if the executive breaches the confidentiality, non-solicitation or non-competition covenants contained in the executive’s change in control agreement. |
(4) | Upon death or disability, termination by Trustmark not for cause or termination by the executive for good reason if provided in the executive’s employment agreement, the executive is entitled to accelerated vesting of a pro-rata portion of his unvested restricted stock and achievement units and a pro-rata portion of time-based restricted stock units (plus accumulated dividends attributable to the shares of restricted stock vesting), based on actual service in the case of |
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time-based restricted stock and actual service and actual performance in the case of performance-based restricted stock and achievement units. Upon a change in control without termination of employment, or retirement at or after age 65 with consent of the Committee and where cause for termination is not present, the executive is entitled to accelerated vesting of a pro-rata portion of his unvested restricted stock and achievement units and 100% of time-based restricted stock units (plus accumulated dividends attributable to the shares of restricted stock vesting), based on actual service in the case of time-based restricted stock and actual service and actual performance in the case of performance-based restricted stock and achievement units. The value of the restricted stock and achievement units upon vesting is based on the closing market price per share of $34.91 as of December 31, 2022, plus the amount of accumulated cash dividends attributable to the shares of restricted stock vesting. |
(5) | Upon death, an incremental pre-retirement death benefit may be payable to the executive’s beneficiary under the Executive Deferral Plan. |
(6) | Upon termination within three years following a change in control, the executive is entitled to accelerated vesting of a portion of his unvested benefit under the Executive Deferral Plan by adding up to five years of service to the executive’s service under the plan. The incremental benefit amount shown in this column is equal to the present value of the amount of the benefit for which vesting would have been accelerated in connection with such a termination as of December 31, 2022. The actuarial assumptions used to calculate the incremental benefit are the same as the assumptions in the “Pension Benefits for 2022” table using a 4.88% rate for present value computations. Mr. Dewey was already fully vested as of December 31, 2022, and would not have received any incremental benefits from this provision. Messrs. Harvey and Stevens would have received the incremental benefits shown in the table in connection with the unvested portions of the previous increase in his annual retirement benefit. Messrs. Owens and Tate do not have benefits under the Executive Deferral Plan. |
(7) | Mr. Dewey is entitled to 24 months of continuing medical, dental, vision and group life coverage on the same premium cost sharing basis as prior to termination if his employment is terminated by Trustmark without cause or if he resigns for good reason, and 36 months of continuing medical, dental, vision and group life coverage on the same premium cost sharing basis as prior to termination upon such events in the case of a change in control. The other NEOs are entitled to 18 months of continuing medical, dental, vision and group life coverage on the same premium cost sharing basis as prior to termination if within two years after a change in control the executive’s employment is terminated by Trustmark other than due to death, disability or for cause or if he resigns for good reason. |
Human Resources Committee Report
The Human Resources Committee has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K, and based on such review and discussions, the Human Resources Committee, as listed below, recommended to the Audit Committee, acting on behalf of the Board, that the Compensation Discussion and Analysis be included in this proxy statement.
Adolphus B. Baker (Chair) | Harris V. Morrissette | |
J. Clay Hays, Jr. M.D. | Richard H. Puckett |
Human Resources Committee Interlocks and Insider Participation
No current or former executive officer or associate of Trustmark or any of its subsidiaries currently serves or has served as a member of the Human Resources Committee or has been involved in any related party transaction as discussed in the section beginning on page 45.
2022 Pay Ratio Disclosure
For 2022, the ratio of the total compensation of Trustmark’s CEO to the total compensation of Trustmark’s median employee was 50 to 1. To calculate this ratio, Trustmark identified its median employee as of December 31, 2021 based on employees’ gross earnings, less before-tax benefit deductions, as reported in Box 5 of the United States Internal Revenue Service Form W-2. Compensation was annualized for employees who worked less than a full year, and compensation for part-time employees was annualized but not converted into a full-time equivalent. Trustmark used the same median employee in 2022 as in 2021, based on its determination that there were no material changes to its employee population or compensation arrangements reasonably likely to result in a change in the ratio. Once identified, the median employee’s total compensation for 2022 was determined in accordance with Item 402(c)(2)(x) of Regulation S-K to be $54,942, as compared to total compensation of $2,739,279 for Trustmark’s CEO.
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Year | Summary Compensation Table Total for CEO ($) | Compensation Actually Paid to CEO (1) ($) | Average Summary Compensation Table Total for non-CEO Named Executive Officers ($) | Average Compensation Actually Paid to non-CEO Named Executive Officers (2) ($) | Value of Initial Fixed $100 Investment Based on: | Net Income (4) ($in thousands) ($) | ROATE (5) (%) | |||||||||||
Trustmark Total Shareholder Return ($) | S&P 500 Regional Banks Total Shareholder Return (3) ($) | |||||||||||||||||
2022 | $2,739,279 | $2,810,846 (6) | $1,047,684 | $1,056,136 (9) | $111.19 | $99.93 | $71,887 | 12.12% | ||||||||||
2021 | $2,472,426 | $2,666,493(7 ) | $1,151,155 | $1,222,268 (10) | $100.46 | $134.16 | $147,365 | 11.45% | ||||||||||
2020 | $3,616,342 | $2,317,370 (8) | $1,277,423 | $948,065( 11) | $82.09 | $95.47 | $160,025 | 12.81% |
(1) | Mr. Dewey served as CEO during 2021 and 2022. Mr. Host was CEO for 2020. |
(2) | In 2022, the other NEOs were Messrs. Owen, Harvey, Stevens and Tate. In 2021, the other NEOs were Messrs. Owens, Host, Harvey, Tate and Louis E. Greer (former CFO). In 2020, the other NEOs were Messrs. Dewey, Greer, Harvey, and Breck Tyler. |
(3) | Market index used for this column is S&P 500 – Regional Banks. |
(4) | Net income for 2022 includes a reduction of $75.6 million (after tax) related to the Stanford settlement. |
(5) | Return on average tangible equity (ROATE) is calculated using net income adjusted for intangible amortization divided by total average tangible common equity (total shareholders’ equity less goodwill and other identifiable intangible assets); it excludes the impact of (i) restructurings, discontinued operations, extraordinary items and other significant non-routine transactions, (ii) material litigation and insurance settlements, (iii) changes to comply with ASU2016-02 and ASU2016-13, and (iv) cumulative effects of income tax and accounting changes in accordance with US GAAP. The amount shown for 2022 excludes the effect of the Stanford settlement. |
(6) | To calculate the compensation “actually paid” to CEO for 2022, the Stock Awards value in the Summary Compensation Table (SCT) was deducted ($799,741) and an amount equal to $871,308 was added, representing the result of the stock calculations required by Item 402(v)(2)(iii)(C) of Regulation S-K. |
(7) | To calculate the compensation “actually paid” to CEO for 2021, the Stock Awards value in the SCT was deducted ($909,128) and an amount equal to $1,103,195 was added, representing the result of the stock calculations required by Item 402(v)(2)(iii)(C) of Regulation S-K. |
(8) | To calculate the compensation “actually paid” to CEO for 2020, the Stock Awards value ($791,431) and the Change in Pension Value ($638,447) in the SCT were deducted and an amount equal to $130,906 was added, representing the result of the stock calculations required by Item 402(v)(2)(iii)(C) of Regulation S-K. |
(9) | To calculate the compensation “actually paid” to other NEOs for 2022, the Stock Awards value in the SCT was deducted (average $249,936), the service cost related to the Supplemental Executive Retirement Plan was added (average $9,803) and an amount equal to $248,584 (average) was added, representing the result of the stock calculations required by Item 402(v)(2)(iii)(C) of Regulation S-K. |
(10) | To calculate the compensation “actually paid” to other NEOs for 2021, the Stock Awards value in the SCT was deducted (average $405,875), the service cost related to the Supplemental Executive Retirement Plan was added ($7,023 average) and an amount equal to $469,964 (average) was added, representing the result of the stock calculations required by Item 402(v)(2)(iii)(C) of Regulation S-K. |
(11) | To calculate the compensation “actually paid” to other NEOs for 2020, the Stock Awards value (average $215,185) and the Change in Pension Value (average $188,344) in the SCT were deducted, the service cost related to the Supplemental Executive Retirement Plan was added (average $14,868) and an amount equal to $59,302 (average) was added, representing the result of the stock calculations required by Item 402(v)(2)(iii)(C) of Regulation S-K. |
· | From 2021 to 2022, compensation actually paid to the CEO increased by $144,353 or 5.4%. Over this same period, the company’s TSR increased by 10.7%, net income decreased by 51.2%, and ROATE increased by 5.9%. Net income for 2022 includes a reduction of $75.6 million (after tax) related to the Stanford settlement; excluding this charge, net income for 2022 would have been $147.5 million. Some key factors that drove the changes in compensation actually paid during this CEO’s second year were an increase in salary, an increase in annual MIP bonus, and a decrease in stock value due to the CEO receiving a one-time award in the prior year as part of his initial transition to CEO. |
· | From 2020 to 2021, compensation actually paid to the CEO increased by $349,123 or 15.1%. Over this same period, the company’s TSR increased by 22.4%, net income decreased by 7.9%, and ROATE decreased by 10.6%. Some key factors that drove the changes in compensation actually paid were the transition to the new first-year CEO during 2021, which represented a traditional compensation decrease in salary, MIP bonus, and equity awards. However, the addition of a one-time transition equity grant for the new CEO and the positive TSR performance for the company in 2021 impacted the CEO stock values, creating the overall increase as shown in the table. |
· | From 2021 to 2022, compensation actually paid to the other NEOs decreased by $166,132 or 13.6%. Over this same period, the company’s TSR increased by 10.7%, net income decreased by 51.2%, and ROATE increased by 5.9%. Net income for 2022 includes a reduction of $75.6 million (after tax), related to the Stanford settlement; without this charge, net income for 2022 would have been $147.5 million. Some key factors that drove the decrease in pay over this period were leadership transitions within the NEO group, including a full year of service by the Executive Chairman in 2021 and only four months of service by the Executive Chairman in 2022, creating an expanded average when compared to the more traditional NEO levels in 2022. |
· | From 2020 to 2021, compensation actually paid to the other NEOs increased by $274,203 or 28.9%. Over this same period, the company’s TSR increased by 22.4%, net income decreased by 7.9%, and ROATE decreased by 10.6%. Some key factors that drove the changes in pay included the impact of leadership transitions within the NEO group, as well as one-time equity grants for two NEOs, and the positive TSR performance for the company in 2021 impacting stock values, creating the majority of the overall increase as shown in the table. |
· | ROATE |
· | EPS |
· | Efficiency Ratio |
· | Non-Performing Assets/total loans + ORE, excluding PPP loans |
· | Non-Interest Expense (Core) |
Employment and Change in Control Agreements with NEOs
Employment Agreement with Mr. Host.Dewey.In connection with hisMr. Dewey’s election and appointment as President and designation as CEO of Trustmark Corporation and the Bank, effective January 1, 2021, Trustmark and Mr. HostDewey entered into a newan employment agreement (the Dewey Agreement). The Dewey Agreement was effective as of January 1, 2011 (the Agreement) to replace his prior 2007 agreement.2021. The Dewey Agreement provides for Mr. HostDewey to serve as President and CEO of Trustmark and the Bank for a term of threefive years beginning January 1, 2011, with an automatic rolling one-year extension each December 31, unless either Trustmark or2021.
Under the Dewey Agreement, Mr. Host provides notice of non-extension, in which case the Agreement would expire at the end of the then-current term. Either Trustmark or Mr. Host may terminate Mr. Host’s employment with 30 days’ notice, except that no prior notice is required in the case of termination for Cause. If not terminated earlier, Mr. Host’s employment under the Agreement will automatically terminate upon his retirement on December 31, 2019, the year he turns 65.
Mr. HostDewey is guaranteed a minimum annual base salary of $550,000 annually,$700,000, subject to annual review. Recognizing the need to be flexible in the current economic environment, the Agreement provides that Mr. Host’sDewey’s base salary may be reduced, however, below $550,000, with his consent$700,000, if Trustmark reduces the base salaries of other senior executives.
Mr. HostDewey is eligible to earn an annual cash bonus, with a bonus target amount of 70%75% of his base salary.salary, or for years after 2021, such greater percentage of his base salary up to a maximum of 100% as may be approved by Trustmark’s Board of Directors. The Human Resources Committee has the discretion to increase the annual bonus above or decrease the annual bonus below the bonus target amount for that year. Mr. HostDewey is also eligible to receive equity compensation awards on such basis as the Human Resources Committee determines and is eligible to participate in any benefit plans or programsof Trustmark’s Board of Directors determines.
The Dewey Agreement provides that are offered to senior executives generally.
Onon any cessation of employment, Mr. Host will beDewey is entitled to his unpaid earned but unpaid base salary and annual bonus and, except in the case of termination for Cause (as defined below), any accrued vacationunpaid earned annual bonus for the prior year (earned compensation). Mr. Host will beHe is entitled to additional severance benefits in the event his employment ends as a result of his death or disability, or in the event his employment is terminated by Trustmark without Cause whether in connection with a change in control of Trustmark or not, or in the event Mr. HostDewey resigns for Good Reason whether(as defined below) in connection with a change in control (as defined below) of Trustmark or not.
If Mr. Dewey’s employment is terminated by Trustmark other than for Cause, death or disability or if he resigns for Good Reason, in each case not in connection with a change in control of Trustmark, or not.
Under the Agreement, Mr. Hosthe is subject to standard confidentiality, non-solicitation and non-competition obligations during the term of the Agreement and for two years after his employment ends. As partial consideration for these obligations after his employment ends, if Mr. Host’s employment is terminated by Trustmark without Cause or if he resigns for Good Reason, he will be entitled to paymentsearned compensation and a payment equal to two times the sum of (i) his annual base salary and (ii) the average of his annual bonuses earned for the three years prior to the end of his employment (the Covenant Payments), with one-halfemployment. He is also entitled to 24 months of continuing medical, dental and vision coverage (or a cash payment in lieu thereof) on the Covenant Payments paid in 12 equal monthly installments commencing 60 days after termination and one-half paid in a lump sum 60 days aftersame premium cost sharing basis as prior to termination.
If Mr. Host’sDewey’s employment is terminated by Trustmark withoutother than for Cause, death or disability or he resigns for Good Reason, in each case within two years after a change in control during the term of the Dewey Agreement, he will beis entitled to the following additional severance benefits in(in addition to the Covenant Payments and earned compensation:compensation): (i) a lump sum payment equal to onethree times the sum of (x) his annual base salary immediately prior to the change in control and (y) the average of his annual bonuses earned for the three years prior to the change in control, (ii) thirty-six36 months of continuing medical, dental and vision and group life coverage (or a cash payment in lieu thereof) on the same premium cost sharing basis as prior to termination, and (iii) accelerated vesting of any unvested stock options.equity incentive awards, with any time- or service-based vesting conditions deemed to be satisfied and any performance-based vesting conditions to be based on performance as of the end of the calendar quarter ending on or prior to the change in control.
If Mr. Host’s employment is terminated by Trustmark without Cause or he resigns for Good Reason where he is not entitled to such change in control enhanced severance benefits, he will be entitled to twenty-four months of continuing medical, dental, vision and group life coverage on the same premium cost sharing basis as prior to termination, in addition to the Covenant Payments and earned compensation.
If Mr. Host’sDewey’s employment is terminated due to disability or if he dies during the term, he or his designated beneficiary, spouse or estate will beis entitled to a lump sum payment of his earned compensation plus a lump-sum payment of the time-weighted pro-rata share of his annual bonus target amount for that year.
In certain cases, some or all of the payments and benefits provided on termination of employment may be delayed for six months following termination to comply with the requirements of Section 409A of the Internal Revenue Code. Any payment required to be delayed would be paid at the end of the six-month periodCertain Defined Terms Used in a lump sum, with any payments due after the six-month period being paid at the normal payment date provided for under theDewey Agreement. In the case of benefits that are delayed, Mr. Host would pay the cost of benefit coverage during the six-month delay period and then be reimbursed by the Company at the end of the six-month period.
The Agreement includes a clawback provision that will permit Trustmark to recover certain incentive-based compensation as required by federal law and as determined by the Committee.
For purposes of this agreement, “Cause”the Dewey Agreement, the terms “Cause,” “Good Reason” and “change of control” have the meanings provided below.
“Cause” means (i) commission of an act of personal dishonesty, embezzlement or fraud, (ii) misuse of alcohol or drugs, (iii) failure to pay any obligation owed to Trustmark or any affiliate, (iv) breach of a fiduciary duty or deliberate disregard of any rule of Trustmark or any affiliate, (v) commission of an act of willful misconduct or the intentional failure to perform stated duties, (vi) willful violation of any law, rule or regulation (other than misdemeanors, traffic violations or similar offenses) or any final cease-and-desist order, (vii) unauthorized disclosure of any confidential information of Trustmark or any affiliate or engaging in any conduct constituting unfair competition or inducing any customer of Trustmark or any affiliate to breach a contract with Trustmark or any affiliate, (viii) conviction of, or entry of a guilty plea
or plea of no contest to, any felony or misdemeanor involving moral turpitude, (ix) continual failure to perform substantially his duties and responsibilities (other than any such failure resulting from incapacity due to disability) after a written demand for substantial performance is delivered which specifically identifies the manner in which he has not substantially performed his duties and responsibilities, (x) violation in any material respect of Trustmark’s policies or procedures, including the Code of Ethics, or (xi) conduct that has resulted, or if it became known by any regulatory or governmental agency or the public is reasonably likely to result, in the good faith judgment of the Board, in material injury to Trustmark, whether monetary, reputational or otherwise.
For purposes of the Agreement, “Good“Good Reason” means (i) a demotion in status, title or position ormaterial diminution the assignment of the person toexecutive officer’s authority, duties or responsibilities, which are materially inconsistent with such status, title or position, (ii) a material breach of the agreement by Trustmark, or (iii) a relocation of Trustmark’s offices to a location more than fifty miles outside of Jackson, Mississippi, without the executive’s consent.
For purposes of the Agreement, “change“Change in control” means (i) the acquisition by any person of the power to vote, or the acquisition of, more than 20% ownership of Trustmark’s voting stock, (ii) the acquisition by any person of control over the election of a majority of the Board, (iii) the acquisition by any person or by persons acting as a “group” for securities law purposes of a controlling influence over Trustmark’s management or policies, or (iv) during any two year period, a more than one-third change in the Board (Existing Board), treating any persons approved by a vote of at least two-thirds of the Existing Board as ongoing members of the Existing Board. However, in the case of (i), (ii), and (iii), ownership or control of Trustmark’s voting stock by a company-sponsored or a company subsidiary-sponsored employee benefit plan will not constitute a change in control.
The amounts which would have been payable to Mr. Host assuming a termination event on December 31, 2015, are addressed in the Potential Payments Upon Termination or Change in Control section beginning on page 38.
The aboveforegoing description is a summary of the material terms and provisions of the Dewey Agreement. For the complete Dewey Agreement, including the exact definitions of the defined terms used therein, refer to the copy of the Dewey Agreement that has been filed with the SEC on October 27, 2021, as Exhibit 10.2 to Trustmark’s Current Report on Form 8-K and is incorporated by reference into this proxy statement.
Change in Control Agreements with Other NEOs. In February 2014, upon the recommendation of the Committee and approval of the Board, Trustmark entered into identical change in control agreements with each of the NEOs (each aNEOs. In addition, Mr. Dewey’s CIC Agreement), other than Mr. Host whose employment agreement alreadyAgreement was terminated effective January 1, 2021, because the Dewey Agreement provides change in control benefits. Under the CIC Agreement, if the executive’s employment is terminated by Trustmark other than due to death or disability or for Cause or he resigns for Good Reason, in each case within two years after a change in control, he will be entitled to the following benefits in addition to any previously earned compensation: (i) a lump sum payment within 60 days after termination equal to two times the sum of his base salary in effect immediately prior to the change in control and the average of his annual bonuses earned for the two years prior to the year in which the change in control occurs (the CIC Severance Benefit), and (ii) eighteen months of continuing medical, dental, vision and group life coverage on the same premium cost sharing basis as prior to termination (the CIC Continuing Benefit). Each CIC Agreement includes standard confidentiality obligations during and after the executive’s employment. In addition, each CIC Agreement includes standard non-solicitation and non-competition obligations during the executive’s employment and for twelve months after the executive’s employment ends when the executive is eligible to receive the CIC Severance Benefit. Each CIC Agreement also provides that Trustmark may retain the CIC Severance Benefit if the executive violates the confidentiality, non-solicitation or non-competition obligation. Each executive is required to sign a release agreement with Trustmark prior to receiving the CIC Severance Benefit and the CIC Continuing Benefit after termination.
For purposes of the CIC Agreements, the terms “Cause” and “change in control” have substantially the same meanings as in Mr. Host’s employment agreement,the Dewey Agreement, and “Good Reason” means (i) a material diminution in the executive’s authority, duties or responsibilities, (ii) a material diminution in the executive’s base compensation, (iii) a material breach of the agreement by Trustmark, or (iv) a
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relocation of Trustmark’s offices to a location more than fifty miles outside of Jackson, Mississippi, provided such relocation is considered a material change in the location where the executive must perform services.
The amounts which would have been payable to the NEOs other than Mr. Dewey under the CIC Agreements assuming a change in control and termination event on December 31, 2015,2022, are addressed in the Potential“Potential Payments Upon Termination or Change in Control sectionControl” table beginning on page 38.36.
The above is a summary of the material terms and provisions of the CIC Agreements. For a complete CIC Agreement, including the exact definitions of the defined terms used therein, refer to the form of CIC Agreement that has been filed with the SEC on February 7, 2014, as Exhibit 10-ad to Trustmark’s Form 8-K Current Report, and is incorporated by reference into this proxy statement.
Deductibility of Compensation.In makingDIRECTOR COMPENSATION
Non-employee director compensation decisions,is determined by the Committee considers Section 162(m)Board, based on the recommendation of the Internal Revenue Code, which limitsHuman Resources Committee. Directors who are employed by Trustmark receive no compensation for Board or committee service. During 2022, each non-employee director who served on the tax deductibilityBoard also served on the Bank Board.
The Board periodically reviews non-employee director compensation to determine if changes are needed, including by comparing it to non-employee director compensation at peer companies.
For 2022, cash compensation for non-employee directors was comprised of an annual retainer of $45,000 for their combined service on the Trustmark Board and the Bank Board. The Lead Director received an annual cash retainer of $30,000 (inclusive of Executive Committee Chair retainer). The Chairs of certain compensation in excessTrustmark Board committees received an annual retainer ($20,000 for the Chair of $1 million paid to Trustmark’s NEOs. Thethe Audit & Finance Committee, believes it is generally in Trustmark’s best interest,$15,000 for the Chairs of the Human Resources Committee and thatthe Enterprise Risk Committee, and $5,000 for the Chair of its shareholders, to offer compensation that is deductible under Section 162(m)the Nominating Committee), and the Chairs of certain Bank Board committees received an annual retainer ($10,000 for the Chairs of the Asset/Liability Committee and the Credit Policy Committee). It is, therefore, the Committee’s general preference that grantsAll members of performance-based equityBoard and other incentive awards made pursuant to Trustmark’s stock and incentive compensation plans comply with the deductibility requirements of Section 162(m) or be in amounts that normally would not be expected to result in non-deductibility under Section 162(m).
The Committee also believes, however, that in certain circumstances factorsBank Board committees, other than tax deductibility should take precedence when determining the formsChair, also received an annual retainer of $2,500 per committee. The Chairman of the Board received an annual retainer of $150,000 for service on the Trustmark Corporation and levelsTrustmark National Bank Boards (inclusive of executive compensation. Given the competitive marketall Committee memberships).
Annual retainer fees were paid monthly. Directors are also eligible to be reimbursed for outstanding executives, for example, the Committee believes that it is important to retain the flexibility to determine compensation elements consistent with Trustmark’s compensation philosophy, even if some executive compensation is not fully deductible under Section 162(m). Accordingly, the Committee does approve elementsexpenses incurred in attending Board and committee meetings.
As of January 1, 2023, cash compensation for certain executives that are not fully deductible bynon-employee directors was comprised of an annual retainer of $45,000 for their combined service on the Trustmark Board and reserves the right to do so in the future when appropriate. For that reason, Trustmark’sBank Board. The Lead Director receives an annual cash bonus management incentive planretainer of $30,000 (inclusive of Executive Committee Chair retainer). The Chairs of Trustmark Board committees other than the Executive Committee (i.e., the Audit, Enterprise Risk, Finance, Human Resources and Nominating & Governance Committees) receive an annual retainer of $20,000. All members of Board and Board committees, other than the Chair, also receive an annual retainer of $2,500 per committee. The Chair receives an annual retainer of $150,000 (inclusive of annual Board retainer and all committee memberships).
For 2022, each director also received an award of time-based restricted stock under the Amended and Restated Stock Plan valued at approximately $55,000. To help align the interests of directors with shareholders and encourage a focus on long-term growth, Trustmark has guidelines that require non-executive directors to own a minimum number of shares of Trustmark stock in an amount equal to a multiple of six times the annual cash retainer as in effect from time to time. The number of shares required to be owned is currently designedcalculated by reference to provide compensation that may not be deductible under Section 162(m)the 10-day trading average share price through March 31 each year. Shares of unvested time-based restricted stock are counted as shares owned for purposes of the guidelines.
Based on the most recent review of ownership level attainment in 2022, all NEOs. Further, thereof the current directors, except General Collins and Mr. Eduardo, meet the stock ownership requirements. Until a director has reached the minimum requirement, the director is no guarantee that compensation awarded or paid byrequired to hold 100% of the shares received from any Trustmark that is intendedstock awards (net of any shares sold to qualify for deductibility under Section 162(m) will be fully deductible. In 2015, a portion of Mr. Host’s compensation was not deductible by Trustmark under Section 162(m)cover tax liabilities).
Policy Against Hedging and Limitations on Pledging. To ensure that executive officersdirectors bear the full risks of stock ownership, Trustmark’s insider trading policyInsider Trading Policy prohibits executive officers,directors, among others, from engaging in options trading, short sales or hedging transactions relating to Trustmark stock. With limited exceptions, executive officersDirectors are also prohibited from pledging or creating a security interest in any Trustmark stock they hold,hold.
Trustmark maintains a Directors’ Deferred Fee Plan for non-employee directors who became directors prior to 2003 and no executive officer currently holds any Trustmark stock that is pledged or otherwise subjectwho elected to a security interest.
Stock Ownership Guidelines. Although the Board believes management’s current ownership of Trustmark stock adequately aligns the interests of management and shareholders,participate in January 2013 the Board adopted stock ownership guidelines for the CEO and other members of executive management in recognition that such guidelines are considered a best compensation practice that mitigates risks associated with Trustmark’s compensation programs and encourages management to focus on long-term growth and financial success. In connection with the January 2015 decision to increase the size of the annual equity-based awards granted to members of the newly formed executive strategy committee, the Board also increased the stock ownership guideline level for the CEO and members of the executive strategy committee. The current guidelines require the CEO and other members of executive management to own a minimum number of shares of Trustmark stock equal in value to a multiple of their base salary in effect when appointed CEO or a member of executive management, as follows:
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The guidelines provide that the applicable ownership level should be reached within five years from the later of January 22, 2013 or the date of appointment as CEO or as a member of the executive strategy committee or executive management, as applicable. Pledged shares are not considered to be owned for purposes of the stock ownership guidelines. The Human Resources Committee reviews stock ownership levels of executive management annually. Until an executive has reached the applicable ownership level, the executive is required to hold 100% of the shares received from any Trustmark stock awards.
Executive Compensation Recoupment. Ethical behavior and integrity remain an important priority for Trustmark. In support of this, and in anticipation of adopting a comprehensive executive compensation recoupment policy (also known as a “clawback” policy), the Committee began including a clawback provision in the performance-based restricted stock awards beginning with awards granted to the executive officers in 2011. Also since 2011, the Committee has included a similar clawback provision in the management incentive plan with respect to annual cash bonuses that may be earned under the plan. Under these provisions, any performance-based restricted stockthe plan, participating directors were required to defer $12,000 of their fees annually to fund a portion of the cost of their defined retirement benefits and death benefits. The amount of the retirement benefit and death benefit has been determined based upon the participant’s annual contribution amount, the length of Board service and the age of the director at date of entry into the plan. The Board amended the plan in 2009 to cease future benefit accruals under and contributions by directors to the plan effective March 1, 2010. The plan requires retirement benefits to commence at a director’s normal retirement date (defined in the plan as March 1 following age 65). Thus, should a director continue service beyond normal retirement date, retirement benefits would begin prior to cessation of Board service. Depending on a number of factors, the vested annual benefit at retirement is payable for the longer of life or restricted stock unit award that veststwenty-five years and, as of December 31, 2022, ranges from $51,000 to $78,000 (taking into account the March 1, 2010, benefit accrual freeze) for current directors who elected to participate in the plan. Trustmark has purchased life insurance contracts on participating directors to fund the benefits under this plan.
Non-employee directors may defer all or cash bonusa part of their annual retainer fees pursuant to the NQDC Plan. The compensation deferred is credited to an account, which is deemed invested in and mirrors the performance of one or more designated investment funds available under the plan and selected at the option of the director. The deferred compensation account will be paid is subject to recovery by Trustmark as required by applicable federal law and on such basis asin a
41
lump sum or in annual installments at a designated time upon the Board determines. The Committee anticipates adoptingoccurrence of an unforeseen emergency or upon a comprehensive executive clawback policy once the SEC publishes final rules implementing the clawback requirements from the Dodd-Frank Act.
Analysisdirector’s retirement or cessation of Risk Associated with Trustmark’s Compensation Policies and Practices. In late 2015 and early 2016, the Committee, together with Trustmark’s risk officers, conducted an in-depth risk assessment of Trustmark’s compensation policies and practices. Management prepared detailed materials regarding the operation of Trustmark’s various compensation arrangements with its associates and submitted the materials to Trustmark’s risk officers, who reviewed the materials with the members of management most closely involved with the respective compensation arrangements. Trustmark’s risk officers identified the key enterprise risks to which Trustmark is subject, including credit, liquidity, market/interest rate, compliance, operational, technology, strategic, reputational and other risks, and focused their reviewservice on the compensation arrangements most likely to implicate those risks. Trustmark’s Chief Risk Officer presented the risk officers’ conclusions and supporting materials to the Committee, which reviewed and discussed the analysis at its meeting on February 17, 2016.
The Committee has concluded that Trustmark’s compensation policies and practices have sufficient mitigating features and controls to maintain an appropriate balance between prudent business risk and resulting compensation and encourage appropriate risk behavior consistent with Trustmark’s risk appetite, business strategy and profit goals. Some of the mitigating features and controls used are the overall compensation mix, weighting of performance metrics, timing of awards in relation to performance measurement period, use of full value equity-based awards with multi-year vesting periods, and establishment of targets with payouts at multiple levels of performance, chargeback provisions on returned or unearned commissions, capped upside opportunities, and oversight by executive management and the Board. In addition, Trustmark’s incentive compensation arrangements are subject to a system of internal controls to ensure that incentive compensation is properly tracked, approved and paid. Trustmark’s internal controls include comparisons throughout the year of performance results against performance requirements, approval by appropriate levels of management, the Committee, the Board and/ or the Bank Board of incentive compensation payouts, with separate review and approval by division controllers of lines of business that have significant incentive compensation payouts, and coordination among human resources, accounting, and payroll personnel to ensure that incentive compensation payouts that have been approved are appropriately reconciled to those approvals before and after payment is made. As a result, the Committee has concluded that Trustmark’s compensation policies and practices are not reasonably likely to have a material adverse effect on Trustmark, do not encourage imprudent risk-taking behavior and are consistent with maintaining the organization’s safety and soundness.
SummaryDirector Compensation Table for 20152022
The following table summarizes theprovides director compensation componentsinformation for the CEO, the CFO and each of the next three most highly compensated executive officers during 2015 and indicates their positions as ofyear ended December 31, 2015. The table includes base salary, cash incentives paid or accrued, as well as amounts for equity awards, retirement benefits and other compensation for 2015, 2014 and 2013. The amounts reported in the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” column were not paid to the NEOs in any year shown. These amounts represent the annual change in the present value of potential future benefits the NEOs might receive upon retirement, assuming the benefits have vested.2022.
Name and Principal Position | Year | Salary ($) | Bonus (1) ($) | Stock ($) | Option Awards (3) ($) | Non-Equity ($) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings(5) ($) | All Other ($) | Total ($) | ||||||||||||||||||||||||||||||||||||
Gerard R. Host | 2015 | $ | 730,000 | --- | $ | 710,112 | --- | $ | 545,091 | --- | $ | 70,037 | $ | 2,055,240 | |||||||||||||||||||||||||||||||
President and CEO, | 2014 | $ | 727,333 | --- | $ | 800,636 | --- | $ | 815,410 | $ | 814,082 | $ | 108,973 | $ | 3,266,434 | ||||||||||||||||||||||||||||||
Trustmark Corporation; President and CEO, Trustmark National Bank | 2013 | $ | 707,000 | --- | $ | 667,616 | --- | $ | 726,978 | --- | $ | 133,224 | $ | 2,234,818 | |||||||||||||||||||||||||||||||
Louis E. Greer | 2015 | $ | 360,000 | --- | $ | 163,886 | --- | $ | 172,836 | $ | 43,017 | $ | 30,486 | $ | 770,225 | ||||||||||||||||||||||||||||||
Treasurer and | 2014 | $ | 358,750 | --- | $ | 147,820 | --- | $ | 258,516 | $ | 297,151 | $ | 32,364 | $ | 1,094,601 | ||||||||||||||||||||||||||||||
Principal Financial Officer, Trustmark Corporation; Executive Vice President and Chief Financial Officer, Trustmark National Bank | 2013 | $ | 349,007 | --- | $ | 120,167 | --- | $ | 230,644 | --- | $ | 41,758 | $ | 741,576 | |||||||||||||||||||||||||||||||
Duane A. Dewey | 2015 | $ | 348,840 | --- | $ | 163,886 | --- | $ | 146,024 | --- | $ | 28,674 | $ | 687,424 | |||||||||||||||||||||||||||||||
President-Corporate Banking, | 2014 | $ | 347,700 | --- | $ | 147,820 | --- | $ | 216,630 | $ | 258,715 | $ | 30,210 | $ | 1,001,075 | ||||||||||||||||||||||||||||||
Trustmark National Bank | 2013 | $ | 338,500 | --- | $ | 120,167 | --- | $ | 179,366 | --- | $ | 39,429 | $ | 677,462 | |||||||||||||||||||||||||||||||
Wayne A. Stevens | 2015 | $ | 333,540 | --- | $ | 163,886 | --- | $ | 186,249 | --- | $ | 36,873 | $ | 720,548 | |||||||||||||||||||||||||||||||
President-Retail Banking, | 2014 | $ | 332,450 | --- | $ | 147,820 | --- | $ | 245,119 | $ | 234,055 | $ | 38,490 | $ | 997,934 | ||||||||||||||||||||||||||||||
Trustmark National Bank | 2013 | $ | 321,000 | --- | $ | 120,167 | --- | $ | 224,557 | --- | $ | 42,263 | $ | 707,987 | |||||||||||||||||||||||||||||||
Breck W. Tyler | 2015 | $ | 306,000 | --- | $ | 131,109 | --- | $ | 387,534 | $ | 3,769 | $ | 20,612 | $ | 849,024 | ||||||||||||||||||||||||||||||
President-Mortgage Services, | 2014 | $ | 306,000 | --- | $ | 147,820 | --- | $ | 343,083 | $ | 276,772 | $ | 22,871 | $ | 1,096,546 | ||||||||||||||||||||||||||||||
Trustmark National Bank | 2013 | $ | 306,000 | --- | $ | 120,167 | --- | $ | 404,725 | --- | $ | 32,119 | $ | 863,011 |
Name (1) | Fees Earned or Paid in Cash (2) ($) | Stock Awards (3) ($) | Option Awards (4) ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings (5) ($) | All Other Compensation (6) ($) | Total ($) | |||||||||
Adolphus B. Baker | $ 65,000 | $ 52,969 | --- | --- | --- | $ 1,279 | $ 119,248 | |||||||||
William A. Brown | $ 65,000 | $ 52,969 | --- | --- | --- | $ 1,279 | $ 119,248 | |||||||||
Augustus L. Collins | $ 50,000 | $ 52,969 | --- | --- | --- | $ 1,279 | $ 104,248 | |||||||||
Tracy T. Conerly | $ 73,500 | $ 52,969 | --- | --- | --- | $ 1,279 | $ 127,748 | |||||||||
Toni D. Cooley (7) | $ 15,833 | --- | --- | --- | --- | --- | $ 15,833 | |||||||||
Marcelo Eduardo | $ 62,500 | $ 52,969 | --- | --- | --- | $ 1,279 | $ 116,748 | |||||||||
J. Clay Hays Jr., M.D. | $ 70,000 | $ 52,969 | --- | --- | --- | $ 1,279 | $ 124,248 | |||||||||
Gerard R. Host (8) | $ 150,000 | $ 52,969 | --- | --- | --- | $ 1,279 | $ 204,248 | |||||||||
Harris V. Morrissette | $ 54,750 | $ 52,969 | --- | --- | --- | $ 1,279 | $ 108,998 | |||||||||
Richard H. Puckett | $ 85,000 | $ 52,969 | --- | --- | --- | $ 1,279 | $ 139,248 | |||||||||
William G. Yates III | $ 50,000 | $ 52,969 | --- | --- | --- | $ 1,279 | $ 104,248 |
Mr. Dewey is not included in this table as he is an associate of Trustmark and thus received no compensation for his service as a director. The compensation received by Mr. Dewey as an associate of Trustmark is shown in the |
(2) | Amounts include fees earned or paid for service on both the Trustmark Board and the Bank Board and their respective committees. The amounts in this column include fees deferred pursuant to the NQDC Plan. For Mrs. Conerly and Mr. Morrissette, the amounts also include fees paid for attendance at meetings of a community bank advisory board of directors. |
(3) | On April 26, 2022, each non-employee director received 1,854 shares of time-based restricted stock units, valued on a 10-day average closing stock price up to and including the date of the grant. Subject to accelerated vesting in full upon a change in control, upon retirement at or after age 70 or cessation of Board service at the end of an elected term, in each case with consent of the Human Resources Committee and where cause for termination is not present, or upon disability, death or termination without cause, the April 26, 2022, grants of restricted units will vest on April 26, 2023. The amounts in this column reflect |
(4) | No stock option awards were made during |
(5) | The amounts shown in the table above |
All Other Compensation for 2015
The detail of all other compensation for 2015 is included in the following table:
Name | Use of Company Airplane (1) ($) | Automobile ($) | Dividends on ($) | Club Dues ($) | Earned ($) | 401(k) Match ($) | Company-Paid Insurance ($) | Total ($) | ||||||||||||||||||||||||||||||||
Gerard R. Host | $ | 14,948 | $ | 7,830 | $ | 24,786 | $ | 6,573 | --- | $ | 15,900 | --- | $ | 70,037 | ||||||||||||||||||||||||||
Louis E. Greer | --- | --- | $ | 5,115 | $ | 9,471 | --- | $ | 15,900 | --- | $ | 30,486 | ||||||||||||||||||||||||||||
Duane A. Dewey | --- | --- | $ | 5,115 | $ | 7,659 | --- | $ | 15,900 | --- | $ | 28,674 | ||||||||||||||||||||||||||||
Wayne A. Stevens | --- | $ | 8,188 | $ | 5,115 | $ | 7,670 | --- | $ | 15,900 | --- | $ | 36,873 | |||||||||||||||||||||||||||
Breck W. Tyler | --- | --- | $ | 4,712 | --- | --- | $ | 15,900 | --- | $ | 20,612 |
The amounts in this column reflect the dividends credited to shares of unvested time-based restricted stock held by the |
Grants of Plan-Based Awards for 2015
The following table presents information regarding incentive-based cash bonuses and equity awards granted to the NEOs during or for the year ended December 31, 2015, under Trustmark’s annual management incentive plan (cash), the mortgage department production bonus incentive for Mr. Tyler (cash) and Amended and Restated Stock Plan (restricted stock/restricted stock units) and in the case of incentive-based awards reflects the amounts that could be earned or received under such awards:
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Possible Payouts Under Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Grant Date Fair Value of Stock and Option | ||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Units (3) (#) | Options (#) | Awards ($/Sh) | Awards (4) ($) | ||||||||||||||||||||||||||||||||||||||||||||
Gerard R. Host | $ | 255,500 | $ | 511,000 | $ | 1,022,000 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||||||||||||
1/27/2015 | --- | --- | --- | 3,371 | 19,262 | 38,524 | --- | --- | — | $ | 494,662 | ||||||||||||||||||||||||||||||||||||||||||||
1/27/2015 | --- | --- | --- | --- | --- | --- | 9,487 | --- | --- | $ | 215,450 | ||||||||||||||||||||||||||||||||||||||||||||
Louis E. Greer | $ | 81,000 | $ | 162,000 | $ | 324,000 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||||||||||||
1/27/2015 | --- | --- | --- | 778 | 4,445 | 8,890 | --- | --- | --- | $ | 114,151 | ||||||||||||||||||||||||||||||||||||||||||||
1/27/2015 | --- | --- | --- | --- | --- | --- | 2,190 | --- | --- | $ | 49,735 | ||||||||||||||||||||||||||||||||||||||||||||
Duane A. Dewey | $ | 78,489 | $ | 156,978 | $ | 313,956 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||||||||||||
1/27/2015 | --- | --- | --- | 778 | 4,445 | 8,890 | --- | --- | — | $ | 114,151 | ||||||||||||||||||||||||||||||||||||||||||||
1/27/2015 | --- | --- | --- | --- | --- | --- | 2,190 | --- | --- | $ | 49,735 | ||||||||||||||||||||||||||||||||||||||||||||
Wayne A. Stevens | $ | 75,047 | $ | 150,093 | $ | 300,186 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||||||||||||
1/27/2015 | --- | --- | --- | 778 | 4,445 | 8,890 | --- | --- | --- | $ | 114,151 | ||||||||||||||||||||||||||||||||||||||||||||
1/27/2015 | --- | --- | --- | --- | --- | --- | 2,190 | --- | --- | $ | 49,735 | ||||||||||||||||||||||||||||||||||||||||||||
Breck W. Tyler | $ | 61,200 | $ | 122,400 | $ | 244,800 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||||||||||||
--- | --- | $ | 225,000 | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||||||||||||||||||||||||||||||
1/27/2015 | --- | --- | --- | 622 | 3,556 | 7,112 | --- | --- | --- | $ | 91,321 | ||||||||||||||||||||||||||||||||||||||||||||
1/27/2015 | --- | --- | --- | --- | --- | --- | 1,752 | --- | --- | $ | 39,788 |
Outstanding Equity Awards at 2015 Fiscal Year-End
The following table presents information regarding unvested performance-based restricted stock and restricted stock units awards and time-based restricted stock awards held by NEOs at December 31, 2015. All awards in the table below were granted under the Amended and Restated Stock Plan. None of the NEOs held any unexercised options at December 31, 2015.
Stock Awards | |||||||||||||||||||||||||
Name | Grant Date | Number of (#) | Market Value of ($) | Equity Incentive Plan Awards: Number of (#) | Equity Incentive Plan Awards: ($) | ||||||||||||||||||||
Gerard R. Host | 1/26/2010 (3) | 1,929 | $ | 44,444 | --- | --- | |||||||||||||||||||
1/22/2013 (4) | --- | --- | 9,395 | $ | 216,461 | ||||||||||||||||||||
1/22/2013 (5) | 7,344 | $ | 169,206 | --- | --- | ||||||||||||||||||||
1/28/2014 (6) | --- | --- | 16,610 | $ | 382,694 | ||||||||||||||||||||
1/28/2014 (5) | 8,181 | $ | 188,490 | --- | --- | ||||||||||||||||||||
1/27/2015 (7) | --- | --- | 19,262 | $ | 443,796 | ||||||||||||||||||||
1/27/2015 (5) | 9,487 | $ | 218,580 | --- | --- | ||||||||||||||||||||
26,941 | $ | 620,720 | 45,267 | $ | 1,042,951 | ||||||||||||||||||||
Louis E. Greer | 1/26/2010 (3) | 538 | $ | 12,396 | --- | --- | |||||||||||||||||||
1/22/2013 (4) | --- | --- | 1,691 | $ | 38,961 | ||||||||||||||||||||
1/22/2013 (5) | 1,322 | $ | 30,459 | --- | --- | ||||||||||||||||||||
1/28/2014 (6) | --- | --- | 3,067 | $ | 70,664 | ||||||||||||||||||||
1/28/2014 (5) | 1,510 | $ | 34,790 | --- | --- | ||||||||||||||||||||
1/27/2015 (7) | --- | --- | 4,445 | $ | 102,413 | ||||||||||||||||||||
1/27/2015 (5) | 2,190 | $ | 50,458 | --- | --- | ||||||||||||||||||||
5,560 | $ | 128,103 | 9,203 | $ | 212,038 | ||||||||||||||||||||
Duane A. Dewey | 1/26/2010 (3) | 538 | $ | 12,396 | --- | --- | |||||||||||||||||||
1/22/2013 (4) | --- | --- | 1,691 | $ | 38,961 | ||||||||||||||||||||
1/22/2013 (5) | 1,322 | $ | 30,459 | --- | --- | ||||||||||||||||||||
1/28/2014 (6) | --- | --- | 3,067 | $ | 70,664 | ||||||||||||||||||||
1/28/2014 (5) | 1,510 | $ | 34,790 | --- | --- | ||||||||||||||||||||
1/27/2015 (7) | --- | --- | 4,445 | $ | 102,413 | ||||||||||||||||||||
1/27/2015 (5) | 2,190 | $ | 50,458 | --- | --- | ||||||||||||||||||||
5,560 | $ | 128,103 | 9,203 | $ | 212,038 | ||||||||||||||||||||
Wayne A. Stevens | 1/26/2010 (3) | 538 | $ | 12,396 | --- | --- | |||||||||||||||||||
1/22/2013 (4) | --- | --- | 1,691 | $ | 38,961 | ||||||||||||||||||||
1/22/2013 (5) | 1,322 | $ | 30,459 | --- | --- | ||||||||||||||||||||
1/28/2014 (6) | --- | --- | 3,067 | $ | 70,664 | ||||||||||||||||||||
1/28/2014 (5) | 1,510 | $ | 34,790 | --- | --- | ||||||||||||||||||||
1/27/2015 (7) | --- | --- | 4,445 | $ | 102,413 | ||||||||||||||||||||
1/27/2015 (5) | 2,190 | $ | 50,458 | --- | --- | ||||||||||||||||||||
5,560 | $ | 128,103 | 9,203 | $ | 212,038 | ||||||||||||||||||||
Breck W. Tyler | 1/26/2010 (3) | 538 | $ | 12,396 | --- | --- | |||||||||||||||||||
1/22/2013 (4) | --- | --- | 1,691 | $ | 38,961 | ||||||||||||||||||||
1/22/2013 (5) | 1,322 | $ | 30,459 | --- | --- | ||||||||||||||||||||
1/28/2014 (6) | --- | --- | 3,067 | $ | 70,664 | ||||||||||||||||||||
1/28/2014 (5) | 1,510 | $ | 34,790 | --- | --- | ||||||||||||||||||||
1/27/2015 (7) | --- | --- | 3,556 | $ | 81,930 | ||||||||||||||||||||
1/27/2015 (5) | 1,752 | $ | 40,366 | --- | --- | ||||||||||||||||||||
5,122 | $ | 118,011 | 8,314 | $ | 191,555 |
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Ms. Cooley retired from the |
Mr. Host ceased serving as Executive Chairman on |
Option Exercises and Stock Vested for 2015
The following table presents information regarding restricted stock that vested during 2015 for each of the NEOs. None of the NEOs exercised options during 2015.
Name | Stock Awards | |||||||||||
Number of Shares (#) | Value Realized on Vesting(2) ($) | |||||||||||
Gerard R. Host | 14,869 | $343,486 | ||||||||||
Louis E. Greer | 3,390 | $ 78,312 | ||||||||||
Duane A. Dewey | 3,390 | $ 78,312 | ||||||||||
Wayne A. Stevens | 3,390 | $ 78,312 | ||||||||||
Breck W. Tyler | 3,390 | $ 78,312 |
| ||
|
The Trustmark Capital Accumulation Plan and the Executive Deferral Plan are discussed in more detail under “Trustmark Capital Accumulation Plan” and “Executive Deferral Plan” on pages 25-26. The following table shows the present value at December 31, 2015, of accumulated benefits payable to each NEO, including the number of years of service credited, under each of the Trustmark Capital Accumulation Plan and the Executive Deferral Plan, determined using interest rate and mortality rate assumptions included in Note 15 to Trustmark’s audited financial statements for the year ended December 31, 2015, in Trustmark’s Annual Report on Form 10-K filed with the SEC on February [ • ], 2016:
Name | Plan Name | Number of Years (#) | Present Value of ($) | Payments During Last Fiscal Year ($) | ||||||||||||||||
Gerard R. Host | Trustmark Capital Accumulation Plan | 25 | $ | 482,872 | --- | |||||||||||||||
Executive Deferral Plan | 23 | $ | 3,661,398 | --- | ||||||||||||||||
Louis E. Greer | Trustmark Capital Accumulation Plan | 22 | $ | 332,175 | --- | |||||||||||||||
Executive Deferral Plan | 17 | $ | 1,017,051 | --- | ||||||||||||||||
Duane A. Dewey | Trustmark Capital Accumulation Plan | 5 | $ | 63,134 | --- | |||||||||||||||
Executive Deferral Plan | 12 | $ | 1,042,227 | --- | ||||||||||||||||
Wayne A. Stevens | Trustmark Capital Accumulation Plan | 23 | $ | 149,812 | --- | |||||||||||||||
Executive Deferral Plan | 12 | $ | 675,926 | --- | ||||||||||||||||
Breck W. Tyler | Trustmark Capital Accumulation Plan | 19 | $ | 322,323 | --- | |||||||||||||||
Executive Deferral Plan | 15 | $ | 833,781 | --- |
Non-Qualified Deferred Compensation for 2015
Trustmark’s non-qualified deferred compensation plan is discussed in more detail under “Non-Qualified Deferred Compensation Plan” on page 26. The following table presents information relating to each NEO’s participation in the plan:
Name | Executive ($) | Trustmark ($) | Aggregate ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance ($) | ||||||||||||||||||||
Gerard R. Host | --- | --- | $ (11,003) | $(299,956) | $ 3,010,313 | ||||||||||||||||||||
Louis E. Greer | $ 5,000 | --- | $ (188) | --- | $ 74,257 | ||||||||||||||||||||
Duane A. Dewey | --- | --- | $ (1,734) | --- | $ 249,257 | ||||||||||||||||||||
Wayne A. Stevens | --- | --- | $ (113) | --- | $ 4,737 | ||||||||||||||||||||
Breck W. Tyler | --- | --- | $ (15,881) | --- | $ 1,119,857 |
Potential Payments Upon Termination or Change in Control
As discussed above, Trustmark’s executive compensation programs, plans and agreements provide for payments to the NEOs in the event of certain terminations of employment or upon a change in control of Trustmark. The following table describes the potential payments that would be made to each of the NEOs in various termination and change in control scenarios based on compensation, benefit and equity levels in effect on December 31, 2015. The amounts shown are estimates, and assume that the termination or change in control event occurred on December 31, 2015. The actual amounts to be paid can only be determined at the time of an NEO’s actual termination of employment or an actual change in control of Trustmark.
In accordance with SEC regulations, the following table does not report any amount to be provided to an NEO that does not discriminate in scope, terms or operation in favor of Trustmark’s executive officers and which is available generally to all salaried employees, and excludes (i) amounts accrued through December 31, 2015, that would be paid in the normal course of continued employment, such as accrued but unpaid salary and bonus amounts, (ii) vested account balances under the Trustmark Capital Accumulation Plan, Executive Deferral Plan, NQDC Plan and 401(k) plan, and (iii) already vested equity awards.
Name | Incremental Compensation and Benefit Payments | Non-CIC Termination by Company by Executive for Good | CIC Termination by Company Without Cause or by Executive for Good | |||
Gerard R. Host(2) | Severance(3) | --- | $1,506,676 | |||
Covenant Payment(3)(4) | $3,013,352 | $3,013,352 | ||||
Restricted Stock -- Accelerated Vesting(5) | $ 880,044 | $ 880,044 | ||||
Executive Deferral Plan(6)(7) | --- | --- | ||||
Health & Welfare Benefits(8) | $ 64,752 | $ 97,128 | ||||
| ||||||
Totals | $3,958,148 | $5,497,200 | ||||
Louis E. Greer | Severance(3) | --- | $1,209,160 | |||
Covenant Payment | --- | --- | ||||
Restricted Stock -- Accelerated Vesting(5) | $ 176,921 | $ 176,921 | ||||
Executive Deferral Plan(6)(7) | --- | $ 203,415 | ||||
Health & Welfare Benefits(8) | --- | $ 47,529 | ||||
| ||||||
Totals | $ 176,921 | $1,637,025 | ||||
Duane A. Dewey | Severance(3) | --- | $1,093,676 | |||
Covenant Payment | --- | --- | ||||
Restricted Stock -- Accelerated Vesting(5) | $ 176,921 | $ 176,921 | ||||
Executive Deferral Plan(6)(7) | --- | --- | ||||
Health & Welfare Benefits(8) | --- | $ 49,409 | ||||
| ||||||
Totals | $ 176,921 | $1,320,006 | ||||
Wayne A. Stevens | Severance(3) | --- | $1,136,756 | |||
Covenant Payment | --- | --- | ||||
Restricted Stock -- Accelerated Vesting(5) | $ 176,921 | $ 176,921 | ||||
Executive Deferral Plan(6)(7) | --- | $ 71,904 | ||||
Health & Welfare Benefits(8) | --- | $ 42,180 | ||||
| ||||||
Totals | $ 176,921 | $1,427,761 | ||||
Breck W. Tyler | Severance(3) | --- | $1,044,838 | |||
Covenant Payment | --- | --- | ||||
Restricted Stock -- Accelerated Vesting(5) | $ 166,307 | $ 166,307 | ||||
Executive Deferral Plan(6)(7) | --- | $ 130,278 | ||||
Health & Welfare Benefits(8) | --- | $ 48,590 | ||||
| ||||||
Totals | $ 166,307 | $1,390,013 |
Human Resources Committee Report
The Human Resources Committee has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K, and based on such review and discussions, the Human Resources Committee, as listed below, recommended to the Audit and Finance Committee, acting on behalf of the Board, that the Compensation Discussion and Analysis be included in this proxy statement.
Human Resources Committee Interlocks and Insider Participation
The following directors served on Trustmark’s Human Resources Committee during 2015: John M. McCullouch (Chairman), Adolphus B. Baker, Daniel A. Grafton and R. Michael Summerford. No current or former executive officer or associate of Trustmark or any of its subsidiaries currently serves or has served as a member of the Human Resources Committee or has been involved in any related party transaction as discussed in the section beginning on page 44.
PROPOSAL 2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
Section 14A of the Exchange Act requires that Trustmark’s shareholders have the opportunity to provide an advisory vote to approve Trustmark’s executive compensation as disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules. Accordingly, Trustmark’s shareholders are hereby given the opportunity to cast an advisory vote to approve or not approve the compensation of Trustmark’s named executive officersNEOs as described above, by voting for or against this proposal.
The Human Resources Committee and Board have designed Trustmark’s executive compensation to recruit, retain and motivate employees who play a significant role in the organization’s current and future success. Trustmark, through the Human Resources Committee, the Board and the contributions of an outside compensation consultant, structures executive compensation to motivate these employees to maximize shareholder value by achieving performance goals while limiting risk appropriately and maintaining the safety and soundness of the organization. For a full description of these executive compensation practices, please see the description provided under the heading “Executive Compensation,” including the “Compensation Discussion and Analysis” and the tabular disclosures of NEO compensation and related disclosures that follow.
This proposal gives you as a shareholder the opportunity to vote for or against the following resolution: “RESOLVED, that the shareholders hereby approve, on an advisory basis, the compensation paid to Trustmark’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and the narrative discussion disclosed in this proxy statement on pages 19 to 40.
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Trustmark believes that its executive compensation and compensation practices and policies are reasonable in comparison to its peer group, are focused on pay-for-performance principles, are strongly aligned with the long-term interest of shareholders and are necessary to attract and retain experienced, highly-qualified executives important to Trustmark’s long-term success and the enhancement of shareholder value. The Board believes that Trustmark’s executive compensation achieves these objectives, and, therefore, recommends that shareholders vote “for”“FOR” the proposal.
Because this vote is advisory, it will not be binding on the Board and will not be construed as overruling any decision made by the Board. The Human Resources Committee and the Board will take into account the outcome of this advisory vote when considering future executive compensation arrangements, but they are not required to do so. Pursuant to the vote of Trustmark’s shareholders at the 2011 Annual Meeting of Shareholders, Trustmark will conduct an advisory vote to approve executive compensation on an annual basis. The next advisory vote to approve executive compensation will occur at the 2017 Annual Meeting of Shareholders.
The Board recommends that shareholders vote “for”“FOR” this proposal to provide advisory approval of Trustmark’s executive compensation.
PROPOSAL 3: ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION
Section 14A of the Exchange Act also requires that Trustmark’s shareholders have the opportunity to recommend how frequently Trustmark should provide an advisory vote on Trustmark’s executive compensation, as disclosed pursuant to the SEC’s compensation disclosure rules, such as Proposal 2 above. By voting on this proposal, shareholders may indicate whether they would prefer that the advisory vote on Trustmark’s executive compensation occur every one, two or three years.
After careful consideration, the Board has determined that an advisory vote on Trustmark’s executive compensation that occurs every year is the most appropriate alternative for Trustmark, and therefore the Board recommends that shareholders vote for a one-year frequency for the advisory vote on Trustmark’s executive compensation.
In formulating its recommendation, the Board considered that an annual advisory vote on executive compensation will allow shareholders to provide Trustmark with their direct input on Trustmark’s executive compensation philosophy, policies and practices as disclosed in the proxy statement every year. Additionally, an annual advisory vote on executive compensation is consistent with Trustmark’s policy of seeking input from, and engaging in discussions with, shareholders on corporate governance matters and executive compensation.
Shareholders are presented with four choices for the frequency of the advisory vote on executive compensation: (1) every one year, (2) every two years, (3) every three years or (4) abstain. Shareholders are not voting on the approval or disapproval of the Board’s frequency recommendation. The option of one year, two years or three years that receives the highest number of votes cast by the shareholders will be the frequency for the advisory vote on executive compensation that has been recommended by the shareholders. The Board will take into account the outcome of the vote when considering how frequently to provide an advisory vote on executive compensation in the future. However, because this vote is advisory and not binding on the Board or Trustmark, the Board may decide that it is in the best interests of Trustmark and its shareholders to select a frequency of advisory vote on executive compensation that differs from the option that receives the highest number of votes from shareholders.
The Board recommends that shareholders vote for a frequency of “ONE YEAR” for advisory votes on Trustmark’s executive compensation.
PROPOSAL 4: APPROVAL OF AN AMENDMENT AND RESTATEMENT OF TRUSTMARK’S ARTICLES OF INCORPORATION TO PROVIDE FOR EXCULPATION OF DIRECTORS IN ACCORDANCE WITH MISSISSIPPI LAW.
Trustmark is asking shareholders to approve an amendment and restatement of its articles of incorporation to provide that directors shall not be liable to Trustmark or its shareholders for money damages for any action, or any failure to take any action, as a director, subject to certain exceptions described below. This is commonly referred to as an “exculpation” clause. Mississippi law provides that directors shall have the benefit of such exculpation if the company’s articles of incorporation provide for it. In addition to adding a new article addressing director exculpation, the proposed amendment and restatement of the articles of incorporation would make non-substantive changes to make consistent the references to Trustmark contained in the articles. The full text of the proposed amended and restated articles of incorporation is attached as Annex A to this proxy statement (the “Amended and Restated Articles”). The Amended and Restated Articles will be approved if the votes cast in favor of the proposal exceed the votes cast opposing the proposal.
On February 15, 2023, the Board unanimously approved the Amended and Restated Articles. The Board believes that adopting the Amended and Restated Articles is advisable and in the best interests of Trustmark and its shareholders and recommends that shareholders approve the Amended and Restated Articles.
Section 79-4-2.02(b)(4) of the Mississippi Code permits a Mississippi corporation to include an exculpation provision in its articles of incorporation eliminating the liability of a director to the corporation or its shareholders for money damages for any action taken, or any failure to take any action, as a director, except liability for (i) the amount of a financial benefit received by a director to which he or she is not entitled; (ii) an intentional infliction of harm on the corporation or the shareholders; (iii) a violation of Section 79-4-8.33 of the Mississippi Code, which governs liability for unlawful distributions; or (iv) an intentional violation of criminal law.
The Board believes the governing instruments of the vast majority of public companies provide for exculpation of directors similar to that being proposed, and that such exculpation provisions have become a routine element of public companies’
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corporate governance structure. The Board believes that adopting the Amended and Restated Articles is in the best interests of Trustmark and its shareholders because adding a director exculpation clause will help Trustmark attract and retain the most highly qualified individuals to serve as directors. The Board believes this is necessary to ensure that concerns about potential exposure to personal liability will not adversely affect the ability of our directors to make the difficult, potentially value-maximizing business decisions that are necessary in today’s highly competitive business environment. In the competitive environment in which we operate, the Board believes an exculpation provision will allow directors to more effectively fulfill their role on behalf of shareholders. The Board also took note of the increasing trend toward greater frequency of litigation and similar claims against directors and the substantial costs associated with defending against such claims, regardless of their merit or their lack thereof. For all of the foregoing reasons, the Board believes adopting the Amended and Restated Articles is in the best interests of Trustmark and its shareholders.
The Board recommends that shareholders vote “FOR” the proposed amended and restated articles of incorporation.
PROPOSAL 5: RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
Trustmark has engaged Crowe Horwath as its independent auditor since December 21, 2015, and the Audit Committee reaffirmed Crowe’s engagement as the independent auditor for the fiscal year ending December 31, 2016.2023. The Board recommends that shareholders vote for ratificationin favor of ratifying the selection of Crowe Horwath.Crowe. If shareholders do not ratify the selection of Crowe, Horwath, the Audit and Finance Committee will consider a change in independent auditor for the next year.
KPMG LLP (KPMG) served as Trustmark’s independent auditor since April 29, 2002, including for the fiscal year ended December 31, 2015.
The Audit and Finance Committee is directly responsible for approving the appointment, compensation retention and oversight ofpaid to Crowe as Trustmark’s independent auditor. In order to assure continuing auditor independence, the Audit and Finance Committee periodically considers whether there should be regular rotation of the independent auditing firm and determined to engage in a competitive process to review the appointment of Trustmark’s independent auditor for the 2016 fiscal year. Following this process and careful deliberation, the Audit and Finance Committee notified KPMG on December 16, 2015 that it had determined to dismiss KPMG as independent auditor, effective as of the date of the filing of the Annual Report on Form 10-K for the fiscal year ended December 31, 2015. On December 21, 2015, based on the recommendation of the Audit and Finance Committee, Trustmark engaged Crowe Horwath as its independent auditor for the fiscal year ending December 31, 2016.
firm. The members of the Audit and Finance Committee and the Board believe that the engagementcontinued retention of Crowe Horwath to serve as Trustmark’s independent auditor is in the best interestsinterest of Trustmark and its shareholders.
Neither of KPMG’s audit reports on Trustmark’s consolidated financial statements for the fiscal years ended December 31, 2014 and 2013 contained an adverse opinion or a disclaimer of opinion, or a qualification or modification as to uncertainty, audit scope or accounting principles. Neither of KPMG’s audit reports on the effectiveness of internal control over financial reporting as of December 31, 2014 and 2013 contained an adverse opinion or disclaimer of opinion, or a qualification or modification as to uncertainty, audit scope or accounting principles.
During Trustmark’s fiscal years ended December 31, 2014 and 2013 and through December 21, 2015, (i) there were no disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure that, if not resolved to KPMG’s satisfaction, would have caused KPMG to make reference to the subject matter in connection with their reports on Trustmark’s consolidated financial statements for such years; and (ii) there were no reportable events, within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.
During Trustmark’s fiscal years ended December 31, 2014 and 2013 and through December 21, 2015, neither Trustmark, nor any party on behalf of Trustmark, consulted with Crowe Horwath with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of the audit opinion that might be rendered on Trustmark’s consolidated financial statements, and no written report or oral advice was provided to Trustmark that Crowe Horwath concluded was an important factor considered by Trustmark in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was subject to any disagreement, as defined in Item 304(a)(1)(iv) of Regulation S-K, or a reportable event within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.
Representatives of both Crowe Horwath and KPMG are expected to be present at the Annual Meetingannual meeting with the opportunity to make a statement, if they desire to do so, and to be available to respond to appropriate questions during the period generally allotted for questions at the meeting.
The Board recommends that shareholders vote “for”“FOR” ratification of the selection of Crowe Horwath as Trustmark’s independent auditor.
AUDIT AND FINANCE COMMITTEE REPORT
Trustmark’s Audit and Finance Committee which conducts the usual and necessary activities in connection with the audit functions of Trustmark, held eight meetings during 2015.Trustmark. The Committee reviewed and discussed with management and KPMGCrowe the consolidated audited financial statements as of and for the three years ended December 31, 2015.2022. The Committee also discussed with KPMGCrowe the matters required to be discussed under the auditing standardsapplicable requirements of the Public Company Accounting Oversight Board (PCAOB), including Auditing Standard No. 16.. The Committee received the written disclosures and the letter from KPMGCrowe required by the applicable requirements of the PCAOB regarding the independent auditor’s communications with the audit committee concerning independence and discussed the independence of KPMG.Crowe. Based on this review, the Committee recommended to the Board that the consolidated audited financial statements be included in Trustmark’s Annual Report on Form 10-K for the year ended December 31, 2015.
NoneAll of the following members of Trustmark’s Audit and Finance Committee serve on the audit committee of another company, and all are independent directors as defined by NASDAQNasdaq Listing Rules:
Tracy T. Conerly (Chair) | ||||
William A. Brown | ||||
Marcelo Eduardo |
The Board has determined that Tracy T. Conerly and R. Michael SummerfordMarcelo Eduardo each qualify as an audit committee financial expert pursuant to the requirements of the SEC.
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Principal Accountant Fees
The following table presents the fees for professional audit services rendered by KPMGCrowe for the audit of Trustmark’s consolidated financial statements for the fiscal years ended December 31, 2015,2022, and December 31, 2014,2021, and fees billed for other services rendered by KPMGCrowe during those periods. All services reflected below for 20152022 and 20142021 were pre-approved in accordance with the policy of the Audit and& Finance Committee.Committee (the relevant responsibilities of which are now performed by the Audit Committee). Information related to audit fees for 20152022 includes amounts billed through December 31, 2015,2022, and additional amounts estimated to be billed for the 20152022 period for audit services rendered.
2015 | 2014 | |||||||
Audit Fees(1) | $ 1,150,000 | $ 850,000 | ||||||
Audit-Related Fees(2) | $ 130,000 | $ 262,960 | ||||||
Tax Fees(3) | --- | --- | ||||||
All Other Fees | --- | --- | ||||||
$ 1,280,000 | $ 1,112,960 | |||||||
(1) Audit fees include fees for professional services in connection with the audit of Trustmark’s consolidated financial statements, audit of internal control over financial reporting, review of the interim consolidated financial statements included in quarterly reports and services provided by KPMG in connection with statutory and regulatory filings. (2) In 2015, audit-related fees included fees for professional services in connection with other various assurance services. In 2014, audit-related fees included fees for professional services in connection with Trustmark’s SOC-1 examination and other various assurance services. (3) KPMG did not provide tax services to Trustmark in 2015 or 2014. |
Year | Audit Fees (1) | Audit-Related Fees (2) | All Other Fees (3) | Total | ||||
2022 | $ 1,265,000 | $ 132,648 | --- | $ 1,397,648 | ||||
2021 | $ 1,175,280 | $ 129,488 | --- | $ 1,304,768 |
(1) | Audit fees include fees for professional services in connection with the audit of Trustmark’s consolidated financial statements, audit of internal control over financial reporting, review of the interim consolidated financial statements included in quarterly reports and services provided in connection with statutory and regulatory filings. |
(2) | Audit-related fees include assurance and related services that are traditionally performed by the independent registered public accounting firm and include compliance testing and reporting, internal control reviews and agreed upon procedure reports. |
(3) | Crowe did not provide any tax services to Trustmark in 2022 or 2021. |
Pre-Approval Policy
The Audit and Finance Committee has adoptedadministers a policy that sets forth guidelines and procedures for the pre-approval of services to be performed by the independent auditor, as well as the fees associated with those services. Annually, the Committee reviews and establishes the types of services and fee levels to be provided by the independent auditor. Any additional services or fees in excess of the approved amounts require specific pre-approval by the Committee. The Committee has delegated to its ChairmanChair the authority to evaluate and approve services and fees in the event that pre-approval is required between meetings. If the ChairmanChair grants such approval, heshe will report that approval to the full Committee at its next meeting. Non-audit services, prohibited by the SEC, are likewise prohibited under the Committee’s pre-approval policy.
RELATED PARTY TRANSACTIONS
Trustmark is asking shareholders to consider two separate but related changes to the way in which nominees are elected as directors. Currently, directors are elected under a plurality voting standard, pursuant to which nominees who receive the most votes are elected as directors. In addition, shareholders are currently permitted to cumulate their votes in elections of directors, which means that a shareholder has the power to give one nominee a number of votes equal to the number of directors to be elected, multiplied by the number of shares held by that shareholder, or to distribute those votes among two or more nominees.
The Board of Directors has recommended that shareholders approve amendments to Trustmark’s articles of incorporation relating to director elections. The proposed amendment presented in Proposal 4 below, which is contingent upon the approval of Proposal 5, will implement a majority voting standard for the election of directors in uncontested elections. In contested elections (elections in which the number of nominees exceeds the number of directors to be elected), directors would continue to be elected by a plurality vote of shareholders. The proposed amendment presented in Proposal 5 below, which is not contingent upon the approval of Proposal 4, will eliminate cumulative voting in all director elections.
The Board has determined that taken together, these proposed amendments represent a balanced and integrated approach designed to provide all of Trustmark’s shareholders a meaningful voice in the election of directors. Together,
the amendments provide shareholders an effective way in which to exercise their voting rights in director elections and to ensure that the directors continue to represent all of Trustmark’s shareholders. In addition, the amendments reduce the possibility that a holder of far less than a majority of the outstanding shares could elect a director even when a significant majority of shares are voted against the election of the director. Because the amendments are designed to work together, the implementation of Proposal 4 (the proposal to amend the articles to implement majority voting in uncontested director elections) is conditioned upon shareholder approval of Proposal 5 (the proposal to amend the articles to eliminate cumulative voting in director elections). Accordingly, unless Proposal 5 is approved, Proposal 4 will not be implemented regardless of the outcome of the vote thereon.
Amendment of the Articles of Incorporation to Require Majority Voting in Uncontested Director Elections
Recognizing that majority voting in director elections is becoming a corporate governance best practice, Trustmark is asking shareholders to approve an amendment to Trustmark’s articles of incorporation that would implement majority voting in uncontested elections of directors. The full text of a new Article Tenth of the articles of incorporation implementing majority voting is attached as Appendix A. In January 2016, the Board of Directors conditionally approved new Article Tenth subject to approval by Trustmark’s shareholders, and further subject to shareholder approval of new Article Eleventh, which is presented in Proposal 5 of this proxy statement.In other words, if approved by shareholders, effectiveness of the proposed articles amendment under this Proposal 4 is further conditioned on shareholder approval of Proposal 5 in this proxy statement relating to the elimination of cumulative voting in director elections.
The proposed amendment under this Proposal 4This section provides that in an uncontested election of directors, a candidate would be elected as a director only if the votes cast for the candidate exceed the votes cast against the candidate. Abstentions will not be counted as votes cast for or against a candidate. If, however, an election of directors is contested (i.e., the number of candidates in any one year exceeds the number of directors to be elected in that year), the proposed amendment to Trustmark’s articles of incorporation would provide that a plurality voting standard will apply and the candidates receiving the greatest number of votes will be elected.
Trustmark believes that the adoption of a majority voting standard in uncontested director elections, coupled with the elimination of cumulative voting in the election of directors outlined in Proposal 5 in this proxy statement, will give shareholders a greater voice in determining the composition of the Board by empowering a majority of shareholders to determine who should serve as a director, with that majority comprised of large and small shareholders alike. In addition, the proposed majority voting standard is consistent with the Board’s desire to maintain alignment of shareholder interests and Board accountability.
Trustmark believes, however, that plurality voting should continue to apply in situations where the number of candidates to be elected exceeds the number of directors to be elected. If a majority voting standard is used in that circumstance, it is possible that not all Board seats would be filled, as it is possible that more than one director candidate could fail to receive a majority of the votes cast in the election.
The implementation of this Proposal 4 is expressly conditioned on the approval by shareholders of Proposal 5information regarding the elimination of cumulative voting in director elections. As discussed in Proposal 5, the Board believes that cumulative voting in the election of directors is fundamentally inconsistent with, and may even thwart the very objective of, majority voting for directors in uncontested elections. Majority voting ensures that directors are elected by at least a majority of the shareholders. With cumulative voting, a holder of far less than a majority of the outstanding shares could elect a director even when a significant majority of shares are voted against the election of the director.Accordingly, even if this Proposal 4 is approved by shareholders at the Annual Meeting, it will not be implemented unless Proposal 5 is also approved by shareholders at the Annual Meeting.
To implement majority voting in uncontested director elections, the Board has also conditionally approved an amendment to Trustmark’s bylaws. The bylaw amendment will only become effective if Trustmark’s shareholders approve both this Proposal 4 to amend Trustmark’s articles of incorporation to require majority voting in uncontested director elections and Proposal 5 to amend Trustmark’s articles of incorporation to eliminate cumulative voting in director elections. Because Mississippi law provides that a director continues to serve until a successor is elected and qualifies or until there is a decrease in the number of directors, the bylaw amendment, if implemented, provides that if a nominee who is an incumbent director is not elected and no successor has been elected at the same meeting, such “holdover” director would be required to tender his or her resignation to the Board. In such event, the Nominating Committee would recommend to the Board whether to accept or reject such resignation, or to take other action taking into account the Board’s fiduciary duties tocertain transactions between Trustmark and its shareholders. In such event, the director tendering a resignation would not be permitted to participate in the Nominating Committee recommendation or decision of the Board with respect to such resignation.
If shareholders do not approve both this Proposal 4 to amend Trustmark’s articles of incorporation to require majority voting in uncontested director elections and Proposal 5 to amend Trustmark’s articles of incorporation to eliminate cumulative voting in director elections, the bylaw amendment will not be implemented.Shareholder approval is not required for the bylaw amendment, and shareholders are not being asked to vote on the bylaw amendment.
This description of the proposed amendment to Trustmark’s articles of incorporation presented in this Proposal 4 is only a summary of the amendment and is qualified in its entirety by reference to the actual text of the proposed amendment to the articles of incorporation, a copy of which is attached as Appendix A. If Trustmark’s shareholders approve the amendment to Trustmark’s articles of incorporation proposed by this Proposal 4, and also approve the amendment to Trustmark’s articles of incorporation proposed by Proposal 5, the amendments to Trustmark’s articles of incorporation will become effective upon filing with the Secretary of State of Mississippi, which is expected to occur promptly following the Annual Meeting. Additionally, provided both Proposal 4 and Proposal 5 are approved, Trustmark’s intention is to also implement the amendment to the bylaws discussed above promptly following the Annual Meeting.
Vote Required
Shareholder approval of the amendment to Trustmark’s articles of incorporation to require majority voting in uncontested director elections requires the affirmative vote of the holders of a majority of the votes cast on the proposal.
The Board recommends that shareholders vote “for” approval of the amendment to Trustmark’s articles of incorporation to require majority voting in uncontested director elections.
Amendment of the Articles of Incorporation to Eliminate Cumulative Voting in Director Elections
At the Annual Meeting, Trustmark is also asking shareholders to approve an amendment of Trustmark’s articles of incorporation to eliminate cumulative voting in director elections. The full text of a new Article Eleventh of the articles of incorporation eliminating cumulative voting is attached as Appendix B. In January 2016, the Board of Directors conditionally approved new Article Eleventh subject to approval by Trustmark’s shareholders. Implementation of the majority voting standard in uncontested director elections proposed in Proposal 4, if approved by shareholders, is contingent upon Trustmark’s shareholders also approving the elimination of cumulative voting in director elections as presented in this Proposal 5.
For a Mississippi corporation incorporated before July 1, 2002, such as Trustmark, unless otherwise provided in such company’s articles of incorporation, Mississippi law provides for cumulative voting by shareholders. As Trustmark’s articles of incorporation do not currently provide otherwise, Trustmark’s shareholders currently have the right to cumulate their votes, which provides shareholders the power to give one nominee a number of votes equal to the number of directors to be elected, multiplied by the number of shares held by that shareholder, or to distribute those votes among two or more nominees. The effect of cumulative voting is potentially to allow a shareholder that holds significantly less than a majority of the outstanding voting power to have the power to elect one or more directors.
In deciding to propose a majority voting standard under Proposal 4, the Board considered how a majority voting standard in uncontested director elections might affect Trustmark’s current cumulative voting procedures for director elections. The Board concluded that it would be very difficult to apply both majority voting and cumulative voting in a director election. In particular, concurrently applying majority voting and cumulative voting standards could raise difficult corporate governance issues and unintended consequences, including the potential for multiple vacancies on the Board if a large shareholder were to cumulate its votes in a director election. Many investors, advisory firms and corporate governance experts have previously recognized significant compatibility issues between majority voting and cumulative voting in director elections.
The Board also believes that cumulative voting is philosophically incompatible with a majority voting standard. As noted above, majority voting for directors seeks to empower a majority of a company’s shareholders to determine who should serve as a director, with that majority comprised of large and small shareholders alike. In contrast, because cumulative voting allows a shareholder to cumulate votes and cast all available votes for a single director nominee, cumulative voting advantages any shareholder with relatively large holdings by increasing the likelihood that such a shareholder can elect its chosen representative (or multiple chosen representatives) to a board of directors, regardless of how the company’s other shareholders vote in the election of directors. The Board believes that each director should represent the interests of all shareholders, rather than the interests of a minority shareholder or special constituency.
As described in the discussion of Proposal 4 above, Trustmark is asking shareholders to consider the adoption of an amendment to Trustmark’s articles of incorporation to implement a majority voting standard for uncontested elections of directors. Consistent with the Board’s belief that in all but contested elections of directors, the approval of a majority of
the votes cast should be required for the election of members of the Board, the Board also believes that the best long-term interests of all shareholders will be served by the elimination of cumulative voting in the election of directors. However, should Trustmark’s shareholders elect to retain cumulative voting in director elections, the Board will not implement a majority voting standard in the election of directors, as such a standard, when coupled with cumulative voting, would, as mentioned above, permit a single shareholder to disproportionately influence director elections.
It should be noted, however, that implementation of the elimination of cumulative voting in director elections proposed in this Proposal 5 is not contingent upon shareholder approval of Proposal 4. The Board has determined that implementing both majority voting in uncontested director elections and eliminating cumulative voting in director elections is consistent with the Board’s desire to maintain alignment of shareholder interests and Board accountability. The Board further believes that these governance improvements are in the best interests of Trustmark and its shareholders. As previously noted, the Board has conditioned the effectiveness of Proposal 4 to require majority voting in uncontested director elections on shareholder approval of this Proposal 5 to eliminate cumulative voting in director elections. The Board has made this determination due to the potential negative consequences of adopting a majority voting standard without eliminating cumulative voting. As the Board does not believe there will be similar negative consequences if Proposal 5 is implemented without the approval of Proposal 4, it has not conditioned the effectiveness of Proposal 5 on shareholder approval of Proposal 4. While the Board believes that the approval of both Proposals 4 and 5 will optimize Trustmark’s ability to provide shareholders with a meaningful voice in director elections, even if shareholders only approve the elimination of cumulative voting in director elections proposed in this Proposal 5, but not the majority voting standard presented in Proposal 4, elimination of cumulative voting in director elections will still move Trustmark’s governance practices towards empowering the broadest group of Trustmark shareholders as it relates to director elections. Therefore, Trustmark intends to implement the elimination of cumulative voting even if shareholders do not approve the majority voting standard proposed in Proposal 4, which provides the added benefit of making it easier for Trustmark to implement a majority voting standard in the future.
The Board’s recommendation to eliminate cumulative voting in director elections is not part of a plan by Trustmark’s management to adopt anti-takeover governance measures and is not a response by Trustmark to any specific effort by a shareholder to accumulate larger holdings of Trustmark’s common stock.
This description of the proposed amendment to Trustmark’s articles of incorporation presented in this Proposal 5 is only a summary of the amendment and is qualified in its entirety by reference to the actual text of the proposed amendment to the articles of incorporation, a copy of which is attached as Appendix B. If approved, the amendment to Trustmark’s articles of incorporation to eliminate cumulative voting in director elections will become effective upon filing with the Secretary of State of the State of Mississippi, which is expected to occur promptly following the Annual Meeting.
Vote Required
Shareholder approval of the amendment to Trustmark’s articles of incorporation to eliminate cumulative voting in director elections requires the affirmative vote of the holders of a majority of the votes cast on the proposal.
The Board recommends that shareholders vote “for” approval of the amendment to Trustmark’s articles of incorporation to eliminate cumulative voting in director elections.
The Bank made a payment of approximately $275,000 in 2015 to Bloomfield Equities, LLC, for the naming rights to the Mississippi Braves AA Baseball Stadium, known as “Trustmark Park.” Ninety percent (90%) of Bloomfield Equities, LLC, is owned indirectly by Trustmark director William G. Yates III and his family through Spectrum Capital, LLC, which is owned thirty-three percent (33%) by Mr. Yates III and sixty-seven percent (67%) by his family and a family trust. The dollar value of Mr. Yates III’s interest in the transaction was approximately $81,751. The collective dollar value of this transaction to the Yates family was approximately $247,500. The Bank expects to make a payment of $275,000 in 2016 to Bloomfield Equities, LLC, for naming rights to Trustmark Park. The specific dollar value of Mr. Yates III’s interest in the 2016 transaction is not known at this time.
In addition, Trustmark purchased a $17,000 sponsorship from Spectrum Events, LLC, for college baseball games played at Trustmark Park in 2015. Spectrum Events, LLC is wholly owned by Spectrum Capital, LLC. The dollar value of Mr. Yates III’s interest in these transactions is approximately $5,610. The collective dollar value of these transactions to the Yates family is approximately $17,000. Trustmark expects to pay a $17,000 sponsorship to Spectrum Events, LLC, for college baseball games played at Trustmark Park in 2016.
In addition, during 2015 Trustmark paid Bloomfield Holdings, LLC $80,000 for, among other things, exclusive banking rights at the Outlets of Mississippi, which is owned by Bloomfield Holdings, LLC. Ninety percent (90%) of Bloomfield Holdings, LLC is owned indirectly by Spectrum Capital, LLC. The dollar value of Mr. Yates III’s interest in the transaction was approximately $26,667. The collective dollar value of this transaction to the Yates family was approximately $80,000. Under this arrangement, Trustmark will also pay Bloomfield Holdings, LLC $80,000 for, among other things, exclusive banking rights at the Outlets of Mississippi in 2016.
During 2013, in connection with the New Markets Tax Credit Program, the Bank purchased $4,350,000 of state and federal tax credits for $2,757,000 through two entities in each of which the Bank holds a 99.99% interest. The federal tax credit, which totaled $1,950,000, was allocated to this transaction by SCC Sub-CDE 2, LLC (SCC Sub), a subsidiary of Southern Community Capital, LLC (SCC), which in turn was allocated the federal tax credit by SCC, a subsidiary of the Bank. SCC owns 0.01% of SCC Sub, with a managing member distribution for that percentage paid back to SCC on a quarterly basis. Of the Bank’s $2,757,000 investment, $2,047,040 was ultimately loaned to Bloomfield Holdings, LLC by SCC Sub in connection with a qualifying real estate development project. The loan by SCC Sub to Bloomfield Holdings, LLC has an annual interest rate of 1.00% and a term of 30 years. The dollar value of Mr. Yates III’s interest in the Bank’s investment was approximately $684,659. The collective dollar value to the Yates family of the Bank’s investment is approximately $2,053,977.
During 2015, W. G. Yates & Sons Construction Company (WGY&S), which is wholly-owned by Mr. Yates III and his family, and for which Mr. Yates III serves as President and CEO,subsidiaries and certain of its wholly-owned subsidiaries paid premiums for employee benefits insurance policies to third party insurance companies. Fisher Brown Bottrell Insurance, Inc. (Fisher Brown Bottrell), a subsidiary of the Bank, received commissions of approximately $1,509,492 from such insurance companies for placing these policies. Trustmark believes the premiumsour directors and the terms of the insurance policies are no more favorable than could be obtained from anon-related party in an arm’s length transaction. Fisher Brown Bottrell continues to serve as insurance agent for these policies for WGY&S in 2016. The dollar value of Mr. Yates III’s interest in this transaction is not known at this time.officers and greater-than-5% shareholders.
The Bank has also made loans to directors, executive officers and principal shareholders and their related interests in 20152022 and in prior years and continues to do so in 2016.2023. Such loans were made in the course of ordinary business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Bank, and do not involve more than the normal risk of collectability or present other unfavorable features. Loan transactions with directors, executive officers and principal shareholders and their related interests are approved by the Board as part of the Bank’s loan review policy under Regulation O.
The Bank made a payment of approximately $275,000 in 2022 to Bloomfield Equities, LLC, for the naming rights to the Mississippi Braves AA Baseball Stadium, known as “Trustmark Park.” Ninety percent (90%) of Bloomfield Equities, LLC, is owned indirectly by Trustmark director William G. Yates III and his family through Spectrum Capital, LLC, which is owned thirty-three percent (33%) by Mr. Yates III and sixty-seven percent (67%) by his family and a family trust. The dollar value of Mr. Yates III’s interest in the transaction was approximately $81,675. The collective dollar value of this transaction to the Yates family (excluding Mr. Yates) was approximately $165,825. The Bank expects to make a payment of $275,000 in 2023 to Bloomfield Equities, LLC, for naming rights to Trustmark Park. The specific dollar value of Mr. Yates III’s interest in the 2023 transaction is not known at this time.
In 2022, the Trustmark logo was incorporated into all of Spectrum Events, LLC marketing and advertising due to a Naming Rights sponsorship agreement for no additional consideration.
In addition, Trustmark paid Bloomfield Holdings, LLC $60,000 in 2022 for, among other things, exclusive banking rights at the Outlets of Mississippi, which is owned by Bloomfield Holdings, LLC. Ninety percent (90%) of Bloomfield Holdings, LLC is owned indirectly by Spectrum Capital, LLC. The dollar value of Mr. Yates III’s interest in the transactions was approximately $17,820. The collective dollar value of these transactions to the Yates family (excluding Mr. Yates) was approximately $36,180. Trustmark anticipates negotiating an agreement with Bloomfield Holdings, LLC in 2023 for, among other things, exclusive banking rights at the Outlets of Mississippi.
During 2022, W. G. Yates & Sons Construction Company (WGY&S) and certain of its wholly owned subsidiaries and affiliates paid premiums for employee benefits insurance policies to third party insurance companies. Fisher Brown Bottrell received commissions of approximately $1.1 million from such insurance companies for placing these policies. Trustmark believes the premiums and the terms of the insurance policies are no more favorable than could be obtained from a nonrelated party in an arm’s length transaction. Fisher Brown Bottrell continues to serve as insurance agent for these policies for WGY&S in 2023. The dollar value of Mr. Yates III’s interest in this transaction is not known at this time. In addition, during 2022, WGY&S and certain of its subsidiaries and affiliates paid the Bank an aggregate of approximately $393,000 in fees for trust and investment management services, including for serving as trustee of certain 401(k) plans for such affiliates. Trustmark believes these fees are no more favorable than could be obtained from a nonrelated party in an arm’s length transaction. The Bank
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continues to provide these services for WGY&S in 2023. The dollar value of Mr. Yates III’s interest in this transaction is not known at this time.
During 2022, MINACT, Inc. (MINACT) and certain of its wholly owned subsidiaries and affiliates paid premiums for employee benefits insurance policies to third party insurance companies. General Collins is the CEO of MINACT. Fisher Brown Bottrell received commissions of approximately $271,000 from such insurance companies for placing these policies. Trustmark believes the premiums and the terms of the insurance policies are no more favorable than could be obtained from a nonrelated party in an arm’s length transaction. Fisher Brown Bottrell continues to serve as insurance agent for these policies for MINACT in 2023.
Trustmark’s Audit and Finance Committee has adopted and managesadministers a written policy with respect to all other related party transactions that governs the review, approval or ratification of covered related party transactions. TheFor purposes of this policy, generally provides thata “related party transaction” is a transaction, arrangement or relationship (or a series of similar transactions, arrangements or relationships) in which Trustmark may enter intois, or will be, a related party transaction only ifparticipant and in which a “related party” has a direct or indirect material interest where the Audit and Finance Committee approves or ratifies such transaction in accordance with the guidelines set forth in the policy and if the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party or the transaction involves compensation approved by the Human Resources Committee.aggregate amount involved exceeds $120,000. A Related Party“related party” is (i) an executive officer, director or nominee for director of Trustmark, (ii) a shareholder owning in excess of 5% of Trustmark’s outstanding equity securities, (iii) a person who is an immediate family member of someone listed in (i) or (ii), or (iv) any firm, corporationan entity (a) which is controlled by someone listed in (i), (ii) or other entity(iii), (b) in which anyonesomeone listed in (i), (ii) or (ii) is employed or is a general partner or principal or is in a similar position or in which such person has a(iii) above owns 5% or greater beneficial ownership interest.more of the outstanding equity securities, or (c) of which someone listed in (i), (ii) or (iii) is an executive officer or general partner.
In the event management recommends aThe policy provides that any related party transaction must be reported to the AuditGeneral Counsel and Finance Committee,may be consummated or may continue only if the Audit and Finance Committee reviews and either approves or disapproves such transaction. At subsequent Committee meetings, as necessary, management updatesdetermines that, under all of the Audit and Finance Committee as to any material change to a proposed or approved related party transaction. The Audit and Finance Committee approves only those related party transactions that are in, or arecircumstances, the transaction is not inconsistent with the best interests of Trustmark. Generally, a transaction that is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party will be presumed to not be inconsistent with the best interests of Trustmark. Certain categories of transactions are deemed to be pre-approved by the Audit Committee and do not require separate approval. These include, among other things, compensation or benefits arrangements approved by the Human Resources Committee and extensions of credit made in the ordinary course of business, on substantially the same terms, including interest rate and collateral, of those prevailing at the time for comparable loans with persons not related to Trustmark and its shareholders, asnot presenting more than the Audit and Finance Committee determines in good faith. normal risk of collectability or other unfavorable features.
The Audit and Finance Committee and/or the Executive Committee in the case of the Bloomfield Holdings, LLC transactions,reviewed, considered, and pre-approvedapproved, or ratified, the 2015 and 2016 payments, as applicable, to Bloomfield Equities, LLC, Spectrum Events, LLC, and Bloomfield Holdings, LLC, WGY&S, and, therefore, to Mr. Yates III,III. The Audit Committee also reviewed, considered, and approved, or ratified, as well asapplicable, the business relationships between Fisher Brown Bottrell, the Bank and WGY&S and certain of its subsidiaries and affiliates, and the business relationship between Fisher Brown Bottrell and WGY&S and certainMINACT, Inc.
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BENEFICIAL OWNERSHIP OF TRUSTMARK STOCK
The following table reflects the number of Trustmark shares beneficially owned by (a) persons known by Trustmark to be the beneficial owners of more than 5% of its subsidiaries.outstanding shares, (b) current directors and director nominees, (c) each of the NEOs within the Executive Compensation section, and (d) current directors and executive officers of Trustmark as a group. The persons listed below have sole voting and investment authority for all shares except as indicated. The percentage of outstanding shares of common stock owned is not shown where less than 1%. All percentage computations are based on 60,979,518 shares of Trustmark common stock outstanding as of February 1, 2023, which includes unvested restricted stock. The number of shares beneficially owned includes shares underlying restricted stock units that vest within 60 days of February 1, 2023. As of February 1, 2023, there were no options outstanding.
Name | Shares Beneficially Owned as of 02/1/23 | Percent of Outstanding Shares | ||||||||||||
BlackRock, Inc.
55 East 52nd Street
New York, New York 10055
| 8,628,385 | (1) | 14.1% | |||||||||||
The Vanguard Group
100 Vanguard Way
Malvern, Pennsylvania 19355
| 6,648,706 | (2) | 10.9% | |||||||||||
The Robert M. Hearin Foundation
The Robert M. Hearin Support Foundation
Post Office Box 16505
Jackson, Mississippi 39236
| 3,983,560 | (3) | 6.5% | |||||||||||
Dimensional Fund Advisors LP
Dimensional Place
6300 Bee Cave Road, Building One
Austin, Texas 78746
| 3,946,176 | (4) | 6.5% | |||||||||||
EARNEST Partners, LLC
1180 Peachtree Street NE
Suite 2300
Atlanta, Georgia 30309
| 3,689,701 | (5) | 6.1% | |||||||||||
Adolphus B. Baker | 42,616 | |||||||||||||
William A. Brown | 16,304 | (6) | ||||||||||||
Augustus L. Collins | 5,669 | |||||||||||||
Tracy T. Conerly | 14,451 | (7) | ||||||||||||
Duane A. Dewey | 56,716 | (8) | ||||||||||||
Marcelo Eduardo | 4,281 | (9) | ||||||||||||
Robert B. Harvey | 36,204 | |||||||||||||
J. Clay Hays, Jr., M.D. | 11,805 | (10) | ||||||||||||
Gerard R. Host | 272,728 | (11) | ||||||||||||
Harris V. Morrissette | 22,137 | |||||||||||||
Thomas C. Owens | 19,774 | |||||||||||||
Richard H. Puckett | 220,701 | (12) | ||||||||||||
Wayne A. Stevens | 41,716 | (13) | ||||||||||||
Granville Tate, Jr. | 23,371 | |||||||||||||
William G. Yates III | 22,548 | |||||||||||||
Directors and executive officers of Trustmark as a group | 831,728 | (14) | 1.4% |
(1) | According to Amendment No. 15 to Schedule 13G filed with the SEC on January 23, 2023, by BlackRock, Inc., as of December 31, 2022, BlackRock, Inc., through its subsidiaries, has sole voting power with respect to 8,511,028 shares of Trustmark common stock and sole investment power with respect to 8,628,385 shares of Trustmark common stock. The foregoing information has been included solely in reliance upon the disclosures contained in the referenced amended Schedule 13G. |
(2) | According to Amendment No. 11 to Schedule 13G filed with the SEC on February 9, 2023, by The Vanguard Group, as of December 31, 2022, The Vanguard Group, through its subsidiaries, has sole voting power with respect to zero shares of Trustmark common stock and sole investment power with respect to 6,537,504 shares of Trustmark common stock. The aggregate amount beneficially owned by each reporting person was 6,648,706 shares of Trustmark common stock. The foregoing information has been included solely in reliance upon the disclosures contained in the referenced amended Schedule 13G. |
(3) | Based solely on information provided to Trustmark by The Robert M. Hearin Foundation on behalf of The Robert M. Hearin Foundation, The Robert M. Hearin Support Foundation, Capitol Street, LLC, and Galaxie Corporation (collectively, Hearin Foundation), as of January 18 2023, the Hearin Foundation beneficially owns 3,983,560 shares of Trustmark common stock including 314,078 shares owned by The Robert M. Hearin Foundation, 3,519,482 shares owned by The Robert M. Hearin Support Foundation, and 150,000 shares owned by Capitol Street, LLC. Capitol Street, LLC is 100% owned by Galaxie Corporation, which |
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may be deemed to be controlled by The Robert M. Hearin Support Foundation. Voting and investment decisions concerning shares beneficially owned by The Robert M. Hearin Foundation and The Robert M. Hearin Support Foundation are made by the Foundations’ trustees: Robert M. Hearin, Jr., Matthew L. Holleman, III, Steve M. Hendrix, E. E. Laird, Jr., Laurie H. McRee and Alan W. Perry. |
(4) | According to Amendment No. 6 to Schedule 13G filed with the SEC on February 10, 2023, by Dimensional Fund Advisors LP, as of December 31, 2022, Dimensional Fund Advisors LP, through its subsidiaries, has sole voting power with respect to 3,872,554 shares of Trustmark common stock and sole investment power with respect to 3,946,176 shares of Trustmark common stock. The aggregate amount beneficially owned by each reporting person was 3,946,176 shares of Trustmark common stock. The foregoing information has been included solely in reliance upon the disclosures contained in the referenced amended Schedule 13G. |
(5) | According to Amendment No. 2 to Schedule 13G filed with the SEC on February 14, 2023, by EARNEST Partners, LLC,, as of December 31, 2022, EARNEST Partners, LLC,, through its subsidiaries, has sole voting power with respect to 2,369,377 shares of Trustmark common stock and sole investment power with respect to 3,689,701 shares of Trustmark common stock. The aggregate amount beneficially owned by each reporting person was 3,689,701 shares of Trustmark common stock. The foregoing information has been included solely in reliance upon the disclosures contained in the referenced amended Schedule 13G. |
(6) | Includes 500 shares held in trust of which Mr. Brown is the co-trustee and sole beneficiary. |
(7) | Includes 1,500 shares owned by her spouse as to which Ms. Conerly has no voting or investment control. |
(8) | Includes 40,930 shares as to which Mr. Dewey shares voting and investment power with his spouse. |
(9) | Includes 1,392 shares owned by his spouse as to which Mr. Eduardo has no voting or investment control. |
(10) | Includes 200 shares as to which Dr. Hays shares voting and investment power with his spouse. |
(11) | Includes 80,000 shares held in trust of which Mr. Host’s spouse is trustee. |
(12) | Includes 183,003 shares owned by his spouse as to which Mr. Puckett has no voting or investment control. |
(13) | Includes 34,425 shares as to which Mr. Stevens shares voting and investment power with his spouse. |
(14) | Includes shares held directly or indirectly by 18 individuals: the currently serving directors and NEOs listed herein, as well as Trustmark’s other remaining executive officers. None of these shares are pledged as security. |
PROPOSALS OF SHAREHOLDERS
Shareholders may submit proposals to be considered at the 20172024 Annual Meeting of Shareholders if they do so in accordance with Trustmark’s bylaws and applicable regulations of the SEC. In accordance with Trustmark’s bylaws as more fully described under “Corporate Governance -- Nomination of Directors” beginning on page 7,9, any shareholder intending to nominate a candidate for election to the Board at Trustmark’s 20172024 Annual Meeting of Shareholders must submit notice to the Secretary of Trustmark no earlier than December [14], 201615, 2023, and no later than January [13], 2017.14, 2024. Any shareholder intending to propose a matter for consideration at Trustmark’s 20172024 Annual Meeting of Shareholders (other than a director nomination) must submit such proposal in writing to the Secretary ofat Trustmark Corporation, Post Office Box 291, Jackson, MS 39205 no later than [January 28], 2017;January 29, 2024; however, in order to be considered for inclusion in Trustmark’s proxy statement for the 20172024 Annual Meeting of Shareholders, the proposal must meet the requirements of SEC Rule 14a-8 and be submitted to the Secretary of Trustmark no later than November [14],
2016.15, 2023. In addition, the proxy solicited by the Board for the 20172024 Annual Meeting of Shareholders will confer discretionary authority to vote on any shareholder proposal presented at the meeting if Trustmark has not received notice of such proposal by [January 28], 2017.January 29, 2024.
Solicitation of proxies will be primarily by mail and electronic delivery. Associates of Trustmark and its subsidiaries may be used to solicit proxies by means of telephone or personal contact but will not receive any additional compensation for doing so. Banks, brokers, trustees and nominees will be reimbursed for reasonable expenses incurred in sending proxy materials to the beneficial owners of such shares. The total cost of the solicitation will be borne by Trustmark.
AVAILABILITY OF PROXY MATERIALS
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on Tuesday, April 26, 2016:25, 2023:
This proxy statement, a form of the proxy card and Trustmark’s 2015 Annual Report to Shareholders2022 Year in Review are available at www.trustmark.com underInvestor Relations/Annual Meeting of Shareholders.
investorrelations.trustmark.com. As permitted by rules adopted by the SEC, Trustmark is furnishing these proxy materials over the Internet to most shareholders. Those shareholders will not receive printed copies of these documents and instead will receive a Notice of Internet Availability containing instructions on how to access the proxy materials over the Internet. The Notice of Internet Availability also contains instructions on how each of those shareholders can request a printed copy of the proxy materials including this proxy statement, a proxy card and Trustmark’s 2015 Annual Report to Shareholders.2022 Year in Review. Shareholders who do not receive a Notice of Internet Availability will receive a printed copy of the proxy materials by mail.
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ANNEX A:
APPENDIX AAMENDED AND RESTATED ARTICLES OF INCORPORATION OF TRUSTMARK CORPORATION
RESTATED
TextARTICLES OF INCORPORATION
OF
TRUSTMARK CORPORATION
FIRST: The name of Amendmentthe corporation is TRUSTMARK CORPORATION (the “Corporation”).
SECOND: The period of its duration is perpetual.
THIRD: The specific purposes for which the Corporation is organized stated in general terms are:
(1) To receive and hold the common stock and other securities of a commercial bank and other financial institutions and business interests.
(2) To engage in acts and activities which directly or indirectly relate to or complement the business of banking or other financial institutions and business interests.
(3) To engage in other investment activities and in the furnishing of goods and services to financial, trade, and commercial activities.
(4) To engage in any and all types of business activity.
(5) To do all things necessary, convenient, or desirable for the accomplishment of any of the purposes or the attainment of any of the objectives herein set forth and to do all things incidental thereto which are not prohibited by law.
FOURTH: The aggregate number of shares the Corporation is authorized to issue is (i) two hundred fifty million (250,000,000) shares of no-par common stock, and (ii) twenty million (20,000,000) shares of no-par preferred stock.
The common stock of the Corporation may be issued in such amounts and for such consideration as determined from time to time by the Board of Directors. The holders of common stock shall have unlimited voting rights and, subject to the preferences and rights, if any, of any holders of any other class of stock, holders of common stock shall have the right to receive such dividends as may be declared, from time to time, by the Board of Directors and shall be entitled to receive the net assets of the Corporation upon liquidation.
The Board of Directors of the Corporation is authorized, subject only to any limitations prescribed by law and the Articles of Incorporation of the Corporation, to Require Majority Votingprovide for the issuance of shares of preferred stock of the Corporation in Uncontested Director Electionsone or more classes or series without any further action of the shareholders of the Corporation by filing such Articles of Amendment as may be required by law establishing the number of such shares to be issued and the designation, powers, terms, preferences, rights and limitations thereof. The authority of the Board of Directors with respect to a class or series shall include, but not be limited to, the authority to determine the following:
New Article Tenth would read(i) The number of shares constituting that class or series and the distinctive designation of that class or series;
(ii) The dividend rate on the shares of that class or series, whether dividends shall be cumulative, and if so, from which date or dates, and the relative rights and priorities, if any, of the right to the payment of dividends on shares of that class or series;
(iii) Whether that class or series shall have voting rights in addition to any voting rights required by law, and, if so, the terms of such voting rights;
(iv) Whether that class or series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provisions for adjustment of the conversion rate as a consequence of such events as the Board of Directors shall determine;
(v) Whether or not the shares of that class or series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date, dates or events upon or after which they shall be redeemable, and the amount or method of determining the amount payable in case of redemption;
(vi) Whether that class or series shall have a sinking fund for the redemption or purchase of shares of that class or series, and, if so, the terms and amount of such sinking fund;
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(vii) The rights of the shares of that class or series in the event of voluntary or involuntary liquidation, dissolution, or winding-up of the Corporation, and the relative rights and priorities, if any, of payment of shares of that class or series; and
(viii) Any other relative rights, preferences, and limitations of that class or series.
FIFTH: The Corporation will not commence business until consideration of the value of at least One Thousand and No/100 Dollars ($1,000.00) has been received for the issuance of shares.
SIXTH: Shareholders shall have no preemptive right to acquire additional or treasury shares of the Corporation.
SEVENTH: The post office address of the Corporation’s registered office is 248 East Capitol Street, Jackson, Mississippi, and the name of its registered agent at such address is Michael A. King.
EIGHTH: The number of directors constituting the initial Board of Directors of the Corporation is three (3). Subsequently the Corporation shall have the number of directors (but not less than three) as may be designated in its entirety as follows:bylaws, any additional directors to be elected at an annual or special meeting of shareholders called for that purpose.
NINTH: The name and post office address of each incorporator is:
Name | Street and Post Office Address | |
Robert M. Hearin | 248 East Capitol Street Jackson, Mississippi | |
John B. Tullos | 248 East Capitol Street Jackson, Mississippi |
TENTH: Except in connection with vacancies as provided for in the corporation’sCorporation’s bylaws, a nominee for director shall be elected at any meeting of shareholders at which a quorum is present if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election; provided, however, that nominees for director shall be elected by a plurality of the votes cast at any meeting of shareholders for which the number of nominees exceeds the number of directors to be elected.
Text of Amendment to Articles of Incorporation to Eliminate Cumulative Voting in Director Elections
New Article Eleventh would read in its entirety as follows:
ELEVENTH: Holders of shares of the corporationCorporation shall not be entitled to cumulate their votes in the election of directors.
TWELFTH: A director of the Corporation shall not be liable to the Corporation or its shareholders for money damages for any action, or any failure to take any action, as a director, except for: (a) the amount of financial benefit received by a director to which he is not entitled; (b) an intentional infliction of harm on the Corporation or the shareholders; (c) a violation of Section 79-4-8.33 of the Mississippi Code of 1972, as amended, as presently in effect or as amended thereafter, pertaining to liability for unlawful distributions; or (d) an intentional violation of criminal law. If Mississippi law is hereafter amended to authorize corporations to take corporate action further limiting or eliminating the personal liability of directors, then the liability of each director of the Corporation shall be limited or eliminated to the full extent permitted by Mississippi law as so amended from time to time. Neither the amendment or repeal of this Article, nor the adoption of any provision of these Articles of Incorporation inconsistent with this Article, shall eliminate or reduce the effect of this Article in respect of any matter occurring, or any cause of action, suit, or claim that, but for this Article, would accrue or arise, prior to such amendment, repeal, or adoption of an inconsistent provision.
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P.O. BOX 291 JACKSON, MS 39205-0291 | VOTE BY INTERNET Shareholders may use the Internet to transmit their voting instructions and for electronic delivery of VOTE BY PHONE Refer to instructions on the Notice of Internet Availability VOTE BY MAIL Shareholders should mark, sign and date their proxy card and return it in the postage- paid envelope provided or return it to Trustmark Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS If you would like to reduce the environmental impact and costs incurred by Trustmark Corporation in mailing proxy materials, you can consent to receive all future proxy statements, proxy cards and annual reports electronically via email or the Internet. To sign up for electronic delivery, please follow the instructions above to vote before the meeting using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.
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KEEP THIS PORTION FOR YOUR RECORDS |
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
TRUSTMARK CORPORATION
Items of Business |
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The Board of Directors recommends a vote FOR all nominees listed in Proposal 1, FOR Proposals 2, 4, and 5, and for a frequency of ONE YEAR for Proposal 3. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
1. Election of Directors - To elect a board of eleven directors to hold office for the ensuing year or until their successors are elected and qualified. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Nominees: | For | Against | Abstain | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||
1a. Adolphus B. Baker | ☐ | ☐ | ☐ | 1g. J. Clay Hays, Jr., M.D. | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||
1b. William A. Brown | ☐ | ☐ | ☐ | 1h. Gerard R. Host | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||
1c. Augustus L. Collins | ☐ | ☐ | ☐ | 1i. Harris V. Morrissette | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||
1d. Tracy T. Conerly | ☐ | ☐ | ☐ | 1j. Richard H. Puckett | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||
1e. Duane A. Dewey | ☐ | ☐ | ☐ | 1k. William G. Yates III | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||
1f. Marcelo Eduardo | ☐ | ☐ | ☐ | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||
2. To provide advisory approval of Trustmark’s executive compensation. | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||||||
Yes | No | 1 Year | 2 Years | 3 Years | Abstain | |||||||||||||||||||||||||||||||||||||||||||||||
Please indicate if you plan to attend this meeting. | ☐ | ☐ | 3. To provide an advisory vote on the frequency of advisory votes on Trustmark’s executive compensation. | ☐ | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||
For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||||||
4. To approve an amendment and restatement of Trustmark’s articles of incorporation to provide for exculpation of directors in accordance with Mississippi law. | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||||||
5. To ratify the selection of Crowe LLP as Trustmark’s independent auditor for the fiscal year ending December 31, 2023. | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||||||
6. To transact such other business as may properly come before the meeting.
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Signature [PLEASE SIGN WITHIN BOX] | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Date | Signature (Joint Owners) | Date |
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting:
The 2023 Notice and Proxy Statement, 2022 Year in Review and 2015 Annual Report to Shareholders 2022 Form 10-K
are available atwww.proxyvote.com.
www.trustmark.com underInvestor Relations/Annual Meeting of Shareholders.
E00143-P72051
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TRUSTMARK CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2023
The shareholder(s) hereby appoint(s) Richard H. Puckett and Tracy T. Conerly, or either of them, as proxies, each with the power to appoint his/her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this proxy card, all of the shares of Common Stock of Trustmark Corporation that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at Trustmark’s Corporate Office located at 248 East Capitol Street, Jackson, Mississippi 39201, on Tuesday, April 25, 2023, at 1:00 p.m. Central Time.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS LISTED ON THE REVERSE SIDE, “FOR” ADVISORY APPROVAL OF TRUSTMARK’S EXECUTIVE COMPENSATION, FOR A FREQUENCY OF “ONE YEAR” FOR ADVISORY VOTES ON TRUSTMARK’S EXECUTIVE COMPENSATION, “FOR” APPROVAL OF AN AMENDMENT AND RESTATEMENT OF TRUSTMARK’S ARTICLES OF INCORPORATION TO PROVIDE FOR EXCULPATION OF DIRECTORS IN ACCORDANCE WITH MISSISSIPPI LAW, AND “FOR” RATIFICATION OF THE SELECTION OF CROWE LLP AS INDEPENDENT AUDITOR FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE OR VOTE BY INTERNET (SEE REVERSE SIDE FOR MORE INFORMATION).
CONTINUED AND TO BE SIGNED ON REVERSE SIDE