2019 Annual Meeting Notice & Proxy Statement | Trustmark Corporation
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
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Trustmark Corporation
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2019 Annual Meeting Notice & Proxy Statement | Trustmark Corporation
Notice of Annual Meeting of Shareholders
The 20192021 Annual Meeting of Shareholders of Trustmark Corporation (Trustmark) will be held as follows:
DATE AND TIME
Tuesday, April 27, 2021, at 1:00 p.m. CT VIRTUAL ATTENDANCE Due to the public health impact of the COVID-19 pandemic, the Annual Meeting will be held virtually. You will be able to attend, vote and submit questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/TRMK2021 and entering the 16-digit control number printed in the box marked by the arrow on your proxy card or printed on your voting instruction form, notice of internet availability of proxy materials, or email previously received. ITEMS OF BUSINESS 1) To elect a board of 12 directors to hold office for the ensuing year or until their successors are elected and qualified. 2) To provide advisory approval of Trustmark’s executive compensation. 3) To ratify the selection of Crowe LLP as Trustmark’s independent auditor for the fiscal year ending December 31, 2021. |  |
4) To transact such other business as may properly come before the meeting. | ||
RECORD DATE
Shareholders of record on March 1, 2019,2021, are eligibleentitled to notice of and to vote at the meeting in person or by proxy.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:
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 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, 2021
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P. O. Box 291 Jackson, Mississippi 39205 |
March 15, 2021
Dear Shareholder: On behalf of your Board of Directors, we cordially invite you to attend Trustmark’s Annual Shareholders’ Meeting on April 27, 2021, at 1:00 p.m. CT. Due to the public health impact of the COVID-19 pandemic, the meeting will be held virtually. At the meeting, you will have the opportunity to elect twelve 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. This past year has been an extremely challenging time for everyone. The effects of the COVID-19 pandemic significantly impacted the ways in which we live, work and interact with one another. As an essential business in the communities we serve, our associates quickly adapted and found new ways to serve customers and meet their financial needs during these unprecedented times. Customers embraced our digital banking platforms, and many associates transitioned to a remote work environment. While not without challenges, our associates never missed a beat. We also leveraged investments in technology and learned lessons that have strengthened the organization. During 2020, we continued to build upon and expand customer relationships as reflected by solid growth in our banking, mortgage banking, wealth management and insurance businesses. Net income and diluted earnings per share reached record levels, and we continued investments to enhance our franchise and competitive position. We also returned capital to shareholders through consistent quarterly dividends, and we made significant contributions to strengthen our communities. We invite you to review our Form 10-K and our 2020 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, |
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| Duane A. Dewey | |
Executive Chairman |  President and Chief Executive Officer |
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Specific Director Experience, Qualifications, Attributes and Skills | ||||
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Analysis of Risk Associated with Trustmark’s Compensation Policies and Practices | ||||
Human Resources Committee Interlocks and Insider Participation | ||||
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Certain Defined Terms Used in Second Host Agreement and Dewey Agreement | 38 | |||
PROPOSAL 3: RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR | ||||
DELINQUENT SECTION 16(a) | ||||
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 2021 Annual Meeting
| Time/Date: | Tuesday, April 27, 2021, at 1:00 p.m. CT | |
Virtual Attendance: | www.virtualshareholdermeeting.com/TRMK2021You will be asked to enter your 16-digit control number printed in the box marked by the arrow on your proxy card or Notice of Internet Availability. | |
| Record Date: | March 1, 2021 | |
Proposal | Description | Board Recommendation | ||
Proposal 1 | Election of 12 directors to hold office for the ensuing year or until their | “FOR” (for each nominee) | ||
Proposal 2 | Advisory approval of Trustmark’s executive compensation | “FOR” | ||
Proposal 3 | Ratification of selection of Crowe LLP as Trustmark’s independent | “FOR” |
Corporate Governance Highlights
Executive Compensation Highlights
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 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 | |
| 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 | |
Corporate Social Responsibility
Trustmark Corporation (Trustmark) is holding its 20192021 Annual Meeting of Shareholders (the Annual Meeting) on Tuesday, April 23, 2019.27, 2021. This proxy statement is being sent on or about March 11, 2019,15, 2021, in connection with the solicitation by the Board of Directors of Trustmark (the Board) of proxies to be voted at the Annual Meeting and at any adjournment or postponement thereof.
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 containing instructions on how to access the proxy materials over the Internet. If you received a Notice of Internet Availability, for additional information please see “Availability of Proxy Materials” on page 42.47 for additional information.
Meeting Location, Date and Time
The Annual Meeting will be held at Trustmark’s Corporate Office located at 248 East Capitol Street, Jackson, Mississippi 39201,in a virtual-only format on Tuesday, April 23, 2019,27, 2021, at 1:00 p.m. CT. Due to the public health impact of the COVID-19 pandemic and so that we may support the health and well-being of our associates, shareholders and the community, the Board has directed that the Annual Meeting be held virtually to allow remote participation by shareholders at the Annual Meeting. To obtain directions to attend the meeting contactvirtually and to vote and submit questions during the Secretary atAnnual Meeting, you may visit 1-601-208-5088www.virtualshareholdermeeting.com/TRMK2021 and enter the 16-digit control number printed in the box marked by the arrow on your proxy card or toll-free at1-800-844-2000printed on your voting instruction form, notice of internet availability of proxy materials, or email previously received. (extension 5088).
Shareholders of record at the close of business on March 1, 2019,2021, are entitled to notice of and to vote at the Annual Meeting in person or by proxy.Meeting. On the record date, Trustmark had outstanding 65,584,36363,537,431 shares of common stock.
A majority of the shares outstanding and entitled to vote constitutes a quorum to transact business at the Annual Meeting. Each share is entitled to one vote on each proposal.
The required vote for each proposal is as follows:
| ● | 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 |
| ● | 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. |
| ● | 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 brokernon-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 ornon-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 isnon-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 “brokernon-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 as independent auditor is considered a routine matter, while the other proposals, i.e., the election of directors and the advisory vote to approve Trustmark’s executive compensation, are considerednon-routine matters.
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 3, 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 theeach director nomineesnominee named in Proposal 1, FOR advisory approval of Trustmark’s executive compensation in Proposal 2, FOR ratification of the selection of Crowe as independent auditor in Proposal 3 and on all other matters in accordance with the recommendations of the Board.
Shareholders of record can vote in person at the Annual Meeting or by proxy without attending the Annual Meeting.
To vote by proxy:
| (1) | Vote by Internet (instructions are on the Notice of Internet Availability or the proxy card), or |
| (2) | If you received a printed copy of this proxy statement, complete the enclosed proxy card and sign, date and return it in the enclosed postage-paid envelope. |
If you hold your shares through a bank, broker or other holder of record, your bank, broker or 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 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.
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 are a shareholder of record, you may revoke your 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 (instructions are on the Notice of Internet 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.
If you hold your shares through a bank, broker or other holder of record, andyour 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 do not plan to vote in person at the Annual Meeting, you should contactby your bank, broker or agent to revoke your proxy or change your vote.other holder of record.
The Board 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.
Trustmark’s governance structure enables the Board to effectively and efficiently address key, specific issues such as business growth, human capital, enterprise risk management and technology, among others. This is accomplished through five standing Board committees and through the effective utilization of the directors’ combined wisdom and diverse experience and business knowledge.
The role of the Board and its committees is to foster Trustmark’s long-term success consistent with its fiduciary responsibilities
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● 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 policy-making | ● 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 requirements | |||
On January 1, 2021, Gerard R. Host became Executive Chairman of Trustmark and Trustmark National Bank (the Bank), and Duane A. Dewey succeeded Mr. Host as President and CEO of Trustmark and CEO of the Bank and continued as President of the Bank. Richard H. Puckett remains as Chairman of the Executive and Nominating Committees and Lead Director of the Board and the Board of Directors of the Bank (the Bank Board). On March 1, 2021, Louis E. Greer retired as Treasurer, Principal Financial Officer and Principal Accounting Officer of Trustmark and Chief Financial Officer (CFO) of the Bank. Following Mr. Greer’s retirement, Thomas C. Owens succeeded Mr. Greer as Treasurer and Principal Financial Officer of Trustmark and CFO of the Bank. In addition, on March 1, 2021, George T. (Tom) Chambers, Jr. succeeded Mr. Greer as Principal Accounting Officer of Trustmark and became Chief Accounting Officer of the Bank, and Maria L. Sugay succeeded Mr. Owens as Bank Treasurer.
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:
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| ● | Directors are required to retire at the age of |
| ● | Directors are |
| ● | The Board has adopted, and annually reviews, formal charters for the Board and its committees to address the governance guidelines and responsibilities of each. |
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| ● | 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 |
| ● | 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. |
| ● | Independent directors meet without management present. |
| ● | The Executive 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 to the Board’s deliberations and processes. |
In December 2018, the Board amended Trustmark’s bylaws to provide aone-year exception from the mandatory retirement age of 70 to permit Mr. Summerford to be nominated for election to an additionalone-year term as director following the completion of his current term at the 2019 Annual Meeting.
The Code of Conduct for Trustmark Directors, Code of Ethics for Senior Financial Officers of Trustmark, Code of Ethics and Procedure to Report Violations of Law or Accounting or Audit Irregularities (Whistleblower Procedures) are available on Trustmark’s website at www.trustmark.com underAbout Us/Investor Relations/Corporate Governance/ Governance Documentsinvestorrelations.trustmark.com or may be obtained, without charge, by written request addressed to the Secretary, Trustmark Corporation, Post Office Box 291, Jackson, MS 39205. Trustmark intends to provide required disclosure of any amendment to or waiver of its codes of conduct/ethics that applies to the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, on www.trustmark.com underAbout Us/Investor Relations/Corporate Governance/Governance Documentsat investorrelations.trustmark.com promptly following any such amendment or waiver. Trustmark may also elect to disclose any such amendment or waiver in a report on Form8-K filed with the Securities and Exchange Commission (SEC). 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.
Meetings of the Board of Directors
The Board met sixeight times in 2018.2020. Each director attended at least 75% of the total number of meetings of the Board and Board committees of which the director was a member in 2018.2020. The Board generally meets jointly with the Bank Board, of Directors of Trustmark National Bank (Bank Board). Sinceand since 2017, all members of the Board have also served as members of the Bank Board.
Director Attendance at the Annual Meeting
Directors are expected to attend the annual meeting of shareholders, and in 2018,2020, all but one of our directors waswere present at the annual meeting.
The Board has 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):
| Adolphus B. Baker | Tracy T. Conerly |
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| J. Clay Hays, Jr., M.D. |
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| William A. Brown | Toni D. Cooley | Harris V. Morrissette | ||||||||
| Augustus L. Collins | Marcelo Eduardo | Richard H. Puckett |
In conjunction with these independence determinations, the Board considered certain relationships, including through family members and business affiliates, that (i) Messrs. Brown and Puckett, and L. Walker,General Collins, Dr. Hays, Mrs. Conerly and Ms. Cooley have as customers of Trustmark National Bank (the Bank) and itsthe Bank’s subsidiary, Fisher Brown Bottrell Insurance, Inc. (Fisher Brown Bottrell) and (ii) Messrs. Baker, Brown, Compton,Eduardo and Puckett, General Collins and L. Walker, Dr. Hays and Ms. Cooley have as
customers of the wealth management and trust services division of the Bank. The Board also noted that a number of directors, including through business affiliates, have customer relationships with the Bank 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.
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 Chairman and CEO to be separate or combined. Since May 2011,
Trustmark has had an independent Board Chairman. At this time, the Board believes that maintainingmaintained separate Board Chairman and CEO positions permitsfrom 2011 until 2020. Following the retirement of the prior Board Chairman at the 2020 annual meeting of shareholders, Trustmark combined the roles of Board Chairman and CEO in order to facilitate a smooth and seamless transition of both Board and executive leadership, consistent with Trustmark’s ongoing succession process. Mr. Host to focus on managing Trustmark’s business operations in his role as CEO while Mr. Summerford,served as Board Chairman maintains responsibility forand CEO through December 31, 2020. During this period of transition, the Board determined that Trustmark would benefit from Mr. Host occupying both roles while leading the Board in its oversight function and consideration of broader corporate strategy. As an independent BoardOn January 1, 2021, Mr. Dewey succeeded Mr. Host as CEO of Trustmark and the Bank, with Mr. Host becoming Executive Chairman of Trustmark and the Bank. In his role as Executive Chairman, Mr. Summerford, who has a broad business backgroundHost focuses on issues involving board governance, corporate strategy, corporate development, investor relations, industry engagement and has developed extensive managerial and leadership skills through his business career, can 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 of the Board, and serve as the primary communicator between the directors and the CEO.civic leadership. The Board believes that this leadership structureMr. Host’s long tenure provides the appropriate balance betweenhim with valuable insights regarding Trustmark’s business, which enable him to offer strategic developmentadvice and independent oversight of management and that it is the most efficient and effective leadership structure for Trustmark at this time. This separation of the roles also fosters greater independence between the Board and management.guidance in his role as Executive Chairman.
In the future, if the CEO were to also serve as Board Chairman, the governance guidelines contained in Trustmark’s Board Charter and Bylaws provide that if the Board Chairman and CEO positions are occupied by the same individual or if the Board Chairman is otherwise not independent, chairmanan independent director shall serve as Chairman of the Executive Committee would serveas well as the Board’s Lead Director. Accordingly, Mr. Puckett has served as the Chairman of the Executive Committee and Lead Director with primary responsibility for chairing meetings.since the 2020 annual meeting of shareholders. The Lead Director would also be responsibleDirector’s responsibilities include (i) chairing meetings and executive sessions of the independent directors, Executive Committee and meetings on matters for which the Board Chairman recuses himself and other meetings in the Board Chairman’s absence, (ii) coordinating with the Board Chairman to develop Board meeting agendas and schedules, (iii) communicating with and advising the Board Chairman, (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.CEO and (vi) providing an alternative communication channel for all directors, including non-executive directors. The Board believes an independent Lead Director serves an important function in providing independent leadership of the Board and strengthening the Board’s oversight of Trustmark’s business. The Board Charter is posted on Trustmark’s website at www.trustmark.com underAbout Us/Investor Relations/Corporate Governance/Governance Documents/Board Charter.investorrelations.trustmark.com.
Committees of the Board of Directors
There are five standing Board committees: Audit & Finance, Enterprise Risk, Executive, Human Resources and Nominating. All of these Board committees, other than the Nominating Committee, are joint committees of the Board and the Bank Board. The Audit & Finance, Human Resources and Nominating committees are comprised solely of independent directors and otherwise satisfy the requirements applicable to such committees under NASDAQNasdaq listing standards.
The Audit & Finance Committee meets regularly throughout the year including meeting with the external and internal auditors without management present. The Committee’s responsibilities include:
| ● | 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 director of internal audit, who reports directly to the Committee. |
| ● | Inquiring of management, the director of internal audit, and the external auditor about significant risks or exposures and assessing steps that management has taken to minimize such risks to Trustmark. |
| ● | Considering and reviewing with the director of internal audit 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. |
| ● | Reviewing Trustmark’s annual budget and monitoring its performance. |
| ● | Oversight |
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The role and responsibilities of the Audit & Finance Committee are described in greater detail in its Charter, which is posted on Trustmark’s website at www.trustmark.com underAbout Us/Investor Relations/Corporate Governance/ Governance Documents/Audit & Finance Committee Charter.investorrelations.trustmark.com.
The Enterprise Risk Committee is responsible for monitoring risks that are being taken by Trustmark. The Committee’s responsibilities include:
| ● | Understanding and analyzing the enterprise-wide effect of those risks. |
| ● | Reporting on risks to the Board. |
| ● | Monitoring capital stress testing results and comparison to risk appetite and other risk evaluation processes. |
| ● | Receiving reports from |
The Executive Committee acts on behalf of the Board if a matter requires Board action before a meeting of the Board can be held. The Committee’s responsibilities include:
| ● | Providing guidance to management on the strategic planning process and issues of strategic importance, including business growth and expansion, material transactions and technology. |
| ● | Oversight of Trustmark’s capital planning |
| ● | Oversight of Trustmark’s capital stress testing activities. |
| ● | Reviewing the corporate governance structure. |
| ● | Evaluating, annually, each director’s performance against specific performance criteria designed to evaluate the director’s contributions to the Board’s deliberations and processes. |
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The Human Resources Committee is responsible for overseeing the development of a program to compensate 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 management talent and orderly CEO succession. In fulfilling its role, the Committee’s responsibilities include:
| ● | Approving management-developed guidelines that shape Trustmark’s compensation strategy and approach. |
| ● | Recommending the skills and experience required of a CEO candidate, subject to final approval by the Board. |
| ● | Recommending the CEO’s compensation and performance evaluation procedures, for final approval by the Board. |
| ● | Recommending compensation for officers who are members of the Executive |
| ● | Recommending awards under Trustmark’s equity compensation plans, for final approval by the Board, subject to limited discretion by the CEO for specified awards. |
| ● | Recommending compensation for directors. |
| ● | Reviewing and approving Trustmark’s compensation disclosures. |
| ● | Overseeing the review of Trustmark’s compensation policies and practices as they relate to risk management. |
All members of the Committee during 20182020 and currently are“non-employee directors” within the meaning of Rule16b-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 NASDAQNasdaq listing rules. The Human Resources Committee Charter is posted on Trustmark’s website at www.trustmark.com underAbout Us/Investor Relations/Corporate Governance/Governance Documents/Human Resources Committee Charter.investorrelations.trustmark.com.
The Nominating Committee is charged with assisting the Board by identifying individuals qualified to become Board members. In fulfilling its role, the Committee’s responsibilities include:
| ● | Seeking, interviewing and recommending individuals for Board service. |
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The Nominating Committee Charter is posted on Trustmark’s website at www.trustmark.com underAbout Us/ Investor Relations/Corporate Governance/Governance Documents/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 Chief Financial OfficerCFO and the Chief Risk Officer. Through these reports, Trustmark’s directors receive information on areas of material risk 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. Since the first quarter of 2020, Trustmark’s directors have been receiving regular updates and reports from Trustmark’s senior management regarding various risks associated with the COVID-19 pandemic, including credit, liquidity, market/interest rate, and operational risk.
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.
As part of its overall oversight of risk management, the Board provides oversight of management’s efforts to address cybersecurity risk by receiving periodic reports at meetings of the Enterprise Risk Committee, and Audit & Finance Committee and Executive Committee, as well as presentations at the Board 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.
The following table shows, for 2018,2020, the membership of each committee and the number of meetings held by each committee during the year:
| Director | Audit & Finance | Enterprise Risk | Executive | Human Resources | Nominating | |||||||||||
Adolphus B. Baker(1) | X | Chair | X | |||||||||||||
William A. Brown | X | X | ||||||||||||||
James N. Compton | X | X | ||||||||||||||
Tracy T. Conerly | Chair | X | X | |||||||||||||
Toni D. Cooley | Chair | X | X | |||||||||||||
J. Clay Hays Jr., M.D. | X | |||||||||||||||
Gerard R. Host | X | |||||||||||||||
John M. McCullouch(2) | X | X | X | |||||||||||||
Harris V. Morrissette(3) | X | X | X | |||||||||||||
Richard H. Puckett | X | X | X | |||||||||||||
R. Michael Summerford(4) | X | Chair | X | Chair | ||||||||||||
Harry M. Walker | ||||||||||||||||
LeRoy G. Walker, Jr. | X | |||||||||||||||
William G. Yates III | X | |||||||||||||||
2018 Meetings | 5 | 4 | 5 | 4 | 1 | |||||||||||
| Director | Audit & Finance | Enterprise Risk | Executive | Human Resources | Nominating | |||||
Adolphus B. Baker | X | Chair | X | |||||||
William A. Brown | X | X | ||||||||
Augustus L. Collins (1) | X | X | ||||||||
James N. Compton (2) | X | X | ||||||||
Tracy T. Conerly | Chair | X | X | |||||||
Toni D. Cooley | Chair | X | X | |||||||
Marcelo Eduardo (3) | X | |||||||||
J. Clay Hays Jr., M.D.(4) | X | X | ||||||||
Gerard R. Host | X | |||||||||
Harris V. Morrissette | X | X | ||||||||
Richard H. Puckett (5) | Chairman/Lead Director | X | Chair | |||||||
R. Michael Summerford (6) | X | X | X | |||||||
Harry M. Walker | X | |||||||||
LeRoy G. Walker, Jr. (7) | X | |||||||||
William G. Yates III | X | |||||||||
2020 Meetings | 5 | 4 | 6 | 6 | 3 | |||||
| (1) |
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| (2) | Mr. |
| (3) | Mr. |
| (4) | Dr. Hays has served on the Human Resources Committee since April |
Mr. Puckett has served as Lead Director of the Board, Chairman of the Executive Committee and Chair of the Nominating Committee since April 28, 2020. |
| (6) | Mr. Summerford retired from the Board on April 28, 2020. Prior to his retirement, he served as Chairman of the Board, Chairman of the Executive Committee, Chair of the Nominating Committee and as a member of the Human Resources Committee. |
| (7) | Mr. L. Walker retired from the Board on April 28, 2020. Prior to his retirement, he served as a member of the Audit & Finance |
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 Chairman of the Executive Committee, who will determine the appropriate committee to receive the communication and take any action deemed necessary by that committee.
Pursuant to Trustmark’s Whistleblower Procedures, any violations of law or complaints or concerns regarding accounting or auditing matters should be reported to (i) Trustmark’s independent online reporting center at www.reportlineweb.com/Trustmark,trustmark, (ii) Trustmark’s independent Hotlinehotline at1-866-979-3769, or (iii) Trustmark’s Ethics Committee Chair at601-208-6867. Complaints will be investigated by Trustmark’s General Counsel and Director of Audit and reported to the Audit & 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 in the election of directors at an annual meeting.
Nominations other than those made by or on behalf of the Board must be made in accordance with procedures set forth in Trustmark’s bylaws. These procedures require that such nominations be in writing and that they be delivered or mailed to Trustmark’s Chairman and received (a) not less than 60 days nor more than 90 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 30 days from the date of the prior year’s annual meeting, not less than 90 days before the date of the annual meeting. The bylaws also require that such notification 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 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.
Nominations not made in accordance with the above bylaw procedure may be disregarded by the Chairman 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 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 Committee in writing addressed to Trustmark Corporation Nominating Committee, Post Office Box 291, Jackson, MS 39205 or by email to boardofdirectors@trustmark.com. In order to give the Nominating Committee adequate time to consider any such individual for nomination as a director at the 20202022 Annual Meeting of Shareholders, such recommendations should be delivered no later than October 1, 2019.2021. In considering an individual recommended by a shareholder but not directly nominated, the Nominating Committee will use the same guidelines as set forth in the Director Qualifications section below.
When identifying potential candidates for director nominees, the Nominating Committee may solicit suggestions from incumbent directors, management or others. All nominees at
Corporate Social Responsibility
Trustmark is committed to fulfilling its responsibilities to its associates, customers, communities and shareholders. Trustmark believes building strong customer relationships is the Annual Meetingresult of knowing its customers and supporting its communities. Robust community engagement, volunteerism, and philanthropy are current Board members.some of the ways in which Trustmark continues to serve its communities. Trustmark is also committed to diversity and social inclusion throughout the organization and supports practices that encourage environmental sustainability. In furtherance of these commitments, Trustmark appointed a Director of Corporate Social Responsibility in 2020 to advance its efforts.
In 2020, Trustmark invested $5.3 million in the form of contributions and sponsorships to local organizations, including $1.5 million given to 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. In response to community needs that surfaced because of the COVID-19 pandemic, Trustmark contributed more than $400,000 to support local food pantries throughout its service areas. Additional contributions included funds for school supplies and computer headsets to support virtual learning.
Trustmark continued to focus on financial literacy, partnering with EVERFI, Inc. to provide online financial literacy courses in approximately 100 schools, educating 9,500 students on financial matters through Trustmark’s Financial Scholars Program. During the year, Trustmark expanded its relationship with EVERFI to utilize the Engage platform, which will allow Trustmark associates to conduct community-based financial literacy sessions, both in-person and virtually.
Trustmark also partnered with Operation HOPE, Inc., a national non-profit organization, to provide financial literacy and counseling support to individuals within the Memphis, Tennessee market. This partnership, called HOPE Inside, provides over 5,000 City of Memphis employees with opportunities to receive financial tools and education to strengthen their financial security. Trustmark committed $200,000 to the two-year partnership, providing a dedicated financial wellness coach to conduct financial literacy seminars, individualized counseling sessions and referrals to disaster relief services. In 2020, more than 1,200 services were provided through this partnership. In recognition of the anticipated long-term impact of the program, Trustmark developed plans to replicate the partnership with Operation HOPE and city governments in the Montgomery, Alabama and Jackson, Mississippi markets in 2021.
Trustmark’s commitment to building and supporting resilient communities includes revitalizing and strengthening underserved communities. Its investments in low-to-moderate income areas included more than $211 million in home mortgage loans and $139 million in small business loans and small farm loans in 2020 and approximately $85 million in community development loans. Also in 2020, Trustmark provided low-to-moderate income borrowers more than $436 million in home mortgage loans. The company’s collaborative work with community service providers, developers, realtors, housing advocates and others resulted in more than $16 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.
During 2020, Trustmark promoted environmental sustainability with the sponsorship of numerous community shredding events to encourage recycling initiatives. Additionally, an LED light conversion project was continued across the organization to increase energy efficiency.
Collectively, these efforts reflect Trustmark’s core values of Integrity, Service, Accountability, Relationships and Solutions and its commitment to strengthen the communities it serves.
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 Committee will use these personal traits, leadership qualities and individual competencies to assess future director nominees’ suitability for Board service. The Nominating 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 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 Committee may consider these factors as it deems appropriate in connection with the general qualifications of each director nominee.
Board service is an extremely important, high 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:
● | Personal and Professional Integrity | ● | High Performance Standards | |||
● | Accountability | ● |
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● | Informed Business Judgment | ● | Business Credibility | |||
● | Mature Confidence |
For individuals considered for Board leadership roles, the following skill sets are required:
● | Communication Skills | ● | Facilitation Skills | |||
● | Crisis Management Skills | ● | Relationship Building/Networking Skills |
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:
| Individual Director Competencies | Board Committees | |||||||||||||||||||
Finance |
Enterprise Risk | Executive |
Resources |
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| Nominating | ||||||||||||||
1. Financial Acumen | ||||||||||||||||||||
Accounting and finance knowledge | ||||||||||||||||||||
Financial statement analysis | ||||||||||||||||||||
Knowledge of capital markets | ||||||||||||||||||||
Financial planning | ||||||||||||||||||||
Ability to communicate financial concepts in lay terms | ||||||||||||||||||||
2. Organizational Effectiveness | ||||||||||||||||||||
Talent management | ||||||||||||||||||||
Understanding of compensation issues | ||||||||||||||||||||
Ability to discern candidate qualifications | ||||||||||||||||||||
3. Strategic Direction | ||||||||||||||||||||
Vision | ||||||||||||||||||||
Strategic perspective | ||||||||||||||||||||
Technology knowledge | ||||||||||||||||||||
Industry knowledge | ||||||||||||||||||||
4. Risk Management Experience | ||||||||||||||||||||
Experience managing risk exposures | ||||||||||||||||||||
Specific Director Experience, Qualifications, Attributes and Skills
The Board believes that each person nominated for election at the Annual Meeting possesses the personal traits described above and that each director nominee who 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 9.12.
PROPOSAL 1: ELECTION OF DIRECTORS
The Board has fixed the number of directors for the coming year at 13.12. The nominees listed herein have been proposed by the Board for election at the Annual Meeting. Mr. Walker will retire at the Annual Meeting. Shares represented by valid proxies will, unless authority to vote is withheld, be voted in favor of the proposed slate of 1312 nominees. 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 to the Board, and no successor is elected, such nominee must tender his or her resignation to the Board. The Nominating Committee will then make a recommendation to the Board on whether to accept or reject the resignation or whether to take other action. The director who tenders his or her resignation may not participate in the recommendation of the Nominating Committee or the decision of the Board 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 Board recommends that shareholders vote “for” the proposed nominees.
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Adolphus B. Baker,
Director of Trustmark since 2007 (Independent Director)
Trustmark Corporation Committees:
● Executive ● Human Resources (Chair) ● Nominating |
Career Highlights:
● Chairman and CEO, Cal-Maine Foods, Inc. (Producer and Distributor of Shell Eggs)
Other Public Company Boards:
● Cal-Maine Foods, Inc. |
Experience and qualifications:Mr. Baker’s position as chairman and chief executive officer of another publicly-traded company 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 National Bank, and particularly as the former chairman of the Bank Board’s Asset Liability 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.
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William A. Brown,
Director of Trustmark since 2017 (Independent Director)
Trustmark Corporation Committees:
● Audit & Finance ● Enterprise Risk |
Career Highlights:
● President and CEO, Brown Bottling Group, Inc. (Beverage Distributor) | ||
Experience and qualifications: Mr. Brown serves as president and chief executive officer of a regional beverage distributor based in Mississippi. He serves on the Boards of the Pepsi Cola Bottlers Association and Wis-Pak/WP Beverages.
Experience and qualifications: Mr. Brown serves as president and chief executive officer 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 asin-depth understanding of the business climate and customer base in significant Trustmark markets. Mr. Brown has also served on the Bank Board’s Credit Policy 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. | ||||
 | Augustus L. Collins, 63 Director of Trustmark since 2020 (Independent Director) Trustmark Corporation Committees: ● Audit & Finance ● Enterprise Risk | Career Highlights: ● CEO, MINACT Inc. (Job Training, Development and Management) Other Public Company Boards: ● Huntington Ingalls Industries | ||
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. | ||||
 | Tracy T. Conerly, 56 Director of Trustmark since 2015 (Independent Director) Trustmark Corporation Committees: ● Audit & Finance (Chair) ● Executive ● Nominating | Career Highlights: ● Partner Emeritus, Carr, Riggs & Ingram, LLC (Accounting) | ||
Experience and qualifications: Mrs. Conerly is a certified public accountant and a certified valuation analyst. Her experience as a former partner at a large certified public accounting firm and former director of a publicly traded financial institution, which was acquired by Trustmark in 2013, has provided her with significant financial and accounting expertise, particularly in the areas of auditing, business valuation and 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 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 serves on the Bank Board’s Asset/Liability 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. | ||||
 | Director of Trustmark since
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Experience and qualifications: Mr. Compton serves as president and chief executive officer of a member-owned,not-for-profit electric generation and transmission cooperative that supplies wholesale electricity and other services to its members. Mr. Compton’s legal background and business acumen provide him with the skills necessary to contribute invaluable insight and broad perspective to Board discussions and qualifies him for service as one of the Board’s audit committee financial experts. In addition, Mr. Compton continues to serve on the Bank Board’s Asset Liability Committee, which provides him with a solid understanding of Trustmark’s balance sheet strategy.
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Trustmark Corporation Committees:
● ● Executive
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Experience and qualifications:Mrs. Conerly’s 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, particularly in the areas of auditing and 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, provide her with valuable experience in financial institution governance and an understanding of markets that are a strategic focus for Trustmark. Mrs. Conerly has also served on the Bank Board’s Asset Liability Committee, providing her with an understanding of Trustmark’s balance sheet strategy, which is a skill essential to the Board’s risk oversight function.
 |
● Nominating | Career Highlights: ● CEO, Systems Electro Coating (Provider of Electrocoating and Related Services to Original Equipment Manufacturers)
Other Public Company Boards: ● Sanderson Farms, Inc. |
Experience and qualifications:Ms. Cooley is the chief executive officer of the Systems Group of Companies, which includes Systems Electro Coating, a Tier One supplier to Nissan, and Systems Automotive Interiors, a Tier One supplier to Toyota. She holds a Juris Doctor degree and is a director for another publicly-traded company as well as several nonpublic organizations. She was appointed a director of the Federal Reserve Bank of Atlanta, New Orleans Branch, in 2019. In addition, Ms. Cooley has served on the Bank Board’s Credit Policy Committee, which has given her a solid understanding 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. | ||||
 | Duane A. Dewey, 62 Director of Trustmark since 2020 Trustmark Corporation Committees: ● Executive | Career Highlights: ● President and Chief Executive Officer, Trustmark Corporation ● President and Chief Executive Officer, Trustmark National Bank |
Experience and qualifications: Mr. Dewey became president and chief executive officer of Trustmark and the Bank on January 1, 2021. He was formerly president and chief operating officer of the Bank from January 1, 2020, to December 31, 2020. He served as chief operating officer of the Bank from January 1, 2019, to December 31, 2019, and as President of Corporate Banking from 2008 to 2018. Mr. Dewey, with 18 years of experience at Trustmark and 36 years in the financial services industry, has worked 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 Board. | ||||
 | Marcelo Eduardo, 58 Director of Trustmark since 2020 (Independent Director) Trustmark Corporation Committees: ● Audit & Finance | Career Highlights: ● Dean, School of Business, Mississippi College |
Experience and qualifications: Mr. Eduardo has served as the Dean of the School of Business at a private college in Mississippi since 2003. He holds Ph.D. (Finance) and MBA 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, which have been published in national and international journals. His expertise in banking and corporate finance, combined with his proven marketing and leadership skills, will provide valuable marketing, strategic and financial perspectives to the Board. Mr. Eduardo also serves on the Bank Board’s Asset/Liability Committee. | ||
  | J. Clay Hays, Jr., M.D.,
Director of Trustmark since 2017 (Independent Director)
Trustmark Corporation Committees:
● Enterprise Risk ● Human Resources | Career Highlights:
● Cardiologist, Partner, President, Jackson |
Experience and qualifications: Dr. Hays is president of Jackson Heart Clinic, PA, one of the largest cardiology groups in Mississippi. He is the executive medical director and chairman of the Mississippi Heart and Vascular Institute of St. Dominic’s Hospital, president elect of the Mississippi State Medical Association, chairman of the Mississippi Healthcare Solutions Institute and secretary of Medical Assurance Company of Mississippi, a statewide medical malpractice insurer. With extensive experience in the medical industry, Dr. Hays is uniquely positioned to advise Trustmark on the healthcare industry. Dr. Hays also serves on the Bank Board’s Asset
Experience and qualifications: Dr. Hays is president of Jackson Heart Clinic, PA, one of the largest cardiology groups in Mississippi. He serves as chairman of the Mississippi Healthcare Solutions Institute and as director and secretary of the Medical Assurance Company of Mississippi, a statewide medical malpractice insurer. He is also a director and immediate past president of the Mississippi State Medical Association. With extensive experience in the medical industry, Dr. Hays is uniquely positioned to advise Trustmark on the healthcare industry. Dr. Hays also serves on the Bank Board’s Asset/Liability Committee. | ||||
  | Gerard R. Host, 66 Director of Trustmark since 2010 Chairman of Trustmark Board from April 2020 to December 2020 Executive Chairman of Trustmark Board since January 2021
Trustmark Corporation Committees: ● Executive | Career Highlights:
● Executive Chairman, Trustmark Corporation and Trustmark National Bank ● Former President and CEO, Trustmark Corporation ● Former President and CEO, Trustmark National Bank
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Experience and qualifications:Mr. Host became president and chief executive officer of Trustmark Corporation and Trustmark National Bank, effective January 1, 2011, having served as president and chief operating officer of Trustmark National Bank prior to that time. He served as a director of the Federal Reserve Bank of Atlanta from 2012 until the end of his second term on December 31, 2018. Throughout his35-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’sin-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.
Experience and qualifications: Mr. Host became Executive Chairman of Trustmark and the Bank on January 1, 2021. Mr. Host served as president and chief executive officer of Trustmark and chief executive officer of the Bank from January 1, 2011, to December 31, 2020, and served as president of the Bank from 2011 to December 31, 2019. He also served as a director of the Federal Reserve Bank of Atlanta from 2012 until the end of his second term on December 31, 2018. Throughout his 37-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. Mr. Host will continue to serve as Executive Chairman of the Trustmark Board following the Annual Meeting. | ||||
  | Harris V. Morrissette,
Director of Trustmark since 2016 (Independent Director)
Trustmark Corporation Committees:
● Audit & Finance ● Human Resources | Career Highlights:
● President, China Doll Rice & Beans, Inc. ● Former President and CEO,
Other Directorships:
● Williamsburg Investment Trust |
Experience and qualifications: Mr. Morrissette serves as the president of a regional packaged food and food services company based in Alabama. His extensive experience in this industry has provided him with significant marketing and business leadership skills. He also serves on the Bank Board’s Credit Policy Committee. Mr. Morrissette’s years of service as a director of BancTrust, and BancTrust’s subsidiary banks in Alabama and Florida,
Experience and qualifications: Mr. Morrissette serves as the president of a regional packaged food and food services company based in Alabama. His prior years of service as a director of a publicly-traded financial institution provide him with valuable experience in financial 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 the skills necessary to contribute invaluable insight and broad perspectives to Board discussions and qualify him for service as one of the Board’s audit committee financial experts. He also serves on the Bank Board’s Credit Policy Committee.
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  | Richard H. Puckett,
Director of Trustmark since 1995 Lead Director of Trustmark since 2020 (Independent Director) Trustmark Corporation Committees: ● Executive (Chairman) ● Human Resources ● Nominating (Chair) | Career Highlights:
● Chairman and CEO, Puckett Machinery (Distributor of Heavy Earth Moving |
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 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 anin-depth understanding of the business climate and customer base in Trustmark’s major legacy markets. His experience and Board tenure provide valuable perspective to his service as Chair of the Bank Board’s Credit Policy Committee. | ||||
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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 essential to his service on the Human Resources Committee. His extensive business background has equipped him with the leadership and consensus-building skills necessary to serve as Chairman of the Board and of the Executive Committee.
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Experience and qualifications: Mr. Walker has extensive banking and financial services experience, having retired after serving 44 years at Trustmark in numerous leadership positions, including Chief Lending Officer and President of the Central Mississippi Region. Mr. Walker’s long-standing history with Trustmark, including his membership on the Board of Directors of Trustmark National Bank, provides a valuable source of knowledge and stability to the Bank Board’s Asset Liability Committee, which he chairs and the Credit Policy Committee on which he serves.
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Director of Trustmark since 2009
Trustmark Corporation Committees:
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Experience and qualifications:Mr. Walker has many 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 nonpublic and civic boards demonstrate his ability to work successfully as part of a team and enable him to contribute diverse perspectives to Board discussions. Mr. Walker also serves on the Bank Board’s Asset Liability Committee and Credit Policy Committee.
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● Enterprise Risk | Career Highlights:
● President and CEO, W.G. Yates & Sons |
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 is also a member of the Bank Board’s Credit Policy Committee.
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 is also a member of the Bank Board’s Credit Policy Committee. 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 Counsel. | ||||
Compensation Discussion and Analysis
Guiding Philosophy.The guiding philosophy of the Human Resources Committee of the Board (the Committee) is to attract and retain highly qualified executives and to motivate them to maximize shareholder value while managing risk appropriately and maintaining the safety and soundness of the 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 and practices reflect the Committee’s guiding philosophy, as shown below:
What we do:
✓ | Substantial portion of executive pay based on |
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performance against goals set by the Board | ||||||||||
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✓ | Stock ownership requirements for executive officers |
✓ | Independent compensation consultant regularly |
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| advises the Committee |
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✓ | Minimum vesting periods of not less than three years | |||||||||
| for equity awards, with three-year cliff vesting of time-based awards |
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✓ | Clawback provisions that permit Trustmark to |
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| 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 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 | |||
| ● |
| |||
| ● | Supports achievement of stock ownership goals
| |||
Changes to Executive Compensation Program in 2018.In 2017, the Committee undertook a comprehensive review of Trustmark’s executive compensation program, and engaged its independent compensation consultant, Pearl Meyer & Partners, LLC (Pearl Meyer), to provide the Committee with a report containing current market data regarding executive compensation in the banking and financial services industry. The report also assessed the competitiveness of Trustmark’s executive compensation and the alignment of pay with performance, and recommended for certain changes in Trustmark’s executive compensation program. Pearl Meyer concluded that compensation for Trustmark’s named executive officers was generally below the median
market values for comparable positions, and, in some cases, significantly below median market values. Pearl Meyer also determined that Trustmark’s executive compensation was fairly well-aligned with the company’s performance, relative to peers, but that Trustmark could have paid more in some periods without negatively impacting the alignment of pay for performance.
Key changes for 2018 are summarized below.
Making Trustmark’s Executive Pay Levels and Mix of Pay More Competitive with the Market.The following changes were driven primarily by the Committee’s desire to make Trustmark’s executive compensation, including the mix of pay, more competitive with the market for comparable positions:
|
|
Enhancing Alignment of Pay and Performance.The following changes were primarily driven by the Committee’s desire to enhance the alignment between pay and performance.
|
|
Enhancing Retention and Long-Term Stock Ownership by Executives.The split of annual LTI awards was changed from 33% time-based and 67% performance-based to 50% for each. The Committee made this change to enhance the retention effect of the LTI awards, which have a three-year cliff vesting feature, and to place more emphasis on encouraging greater stock ownership over the long term. At the same time, the time-based awards have an incentive effect since their value depends on Trustmark’s stock price.
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 helping to achieve these goals by aligning compensation with Trustmark’s performance. Key financial and core operating results for 2018 include2020 included the following:
| ● | record net income |
| ● | diluted earnings per share totaled |
| ● |
|
| ● | return on average |
|
| ● | loans held for investment increased |
| ● |
|
| ● | deposits increased $2.8 billion, or 24.9%, to $14.0 billion from prior year, |
| ● | total risk-based capital ratio of 14.12% at year-end 2020, up from 13.25% at end of prior year, and |
| ● |
|
In 2017, the net income and diluted earnings per share figures above have been adjusted for significantnon-routine transactions and areReturn on average tangible equity is a non-GAAP financial measures. Reconciliations of thesenon-GAAP measures tomeasure, but does not have a comparable measuresGAAP financial measure. Return on average tangible equity is calculated in accordance with generally accepted accounting principles can be found under Part II, Item 7 in
Trustmark Corporation’s Annual Report on Form10-Kusing net income adjusted for the year ended December 31, 2018, filed with the SEC on February 19, 2019.intangible amortization divided by total average tangible common equity (total shareholders’ equity less goodwill and other identifiable intangible assets).
The Committee uses both annual incentive cash bonuses and equity awards to link executive pay with Trustmark’s performance. Payouts under the annual management incentive plan are based on Trustmark’s achievement of key corporate, strategic and line of business performance goals. A minimum achievement of the threshold is required to earn the minimum annual cash bonus, and Trustmark performance that exceeds the target results in higher bonus awards. In 2018,2020, Trustmark’s performance resulted in average payouts for the NEOs under the annual management incentive plan of 107%,172% of target, out of a maximum potential payout of 200%. In recent years, cash bonuses under the annual management incentive plan have averaged approximately 32%35% of the CEO’s and 25%26% of the other NEOs’ total annual compensation.
Total equity awards granted in 2020 represent approximately 28% for the CEO’s, and 20% for the other NEOs’, total annual compensation. Performance-based equity awards granted in 2018,2020, which represented approximately 17%14% (for the CEO) and 12%10% (for the other NEOs) of each NEO’s total annual compensation, will 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 2018 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. Performance-based equity awards granted in prior years were earned based on Trustmark’s achievement of ROATE and TSR, both compared to Trustmark’s peer group over a three-year performance period. Trustmark’s performance over the three years ended December 31, 2018,2020, resulted in vesting of the performance-based restricted stock awards granted in 20162018 at a 78%93.5% performance-level, out of a maximum potential vesting of 200%. For the same three-year period, Trustmark achieved 103.10% of absolute target level for ROATE and ranked in the 5th percentile for ROATE and in the 64th42nd percentile for TSR among the 1619 peer companies utilized in Trustmark’s 20162018 performance-based restricted stock awards.
Time-based equity awards, which in 20182020 represented approximately 18%14% of total annual compensation (for the CEO) and 12%10% (for the other NEOs), further encourage a focus on long-term growth and financial success by aligning the interests of management and Trustmark’s shareholders.
As a result of the structure of Trustmark’s annual management incentive plan and its performance-based equity awards, the Committee believes that compensation paid to its NEOs is effectively aligned with Trustmark’s performance. Average payouts of annual cash bonuses under the management incentive plan of 119%123.7% 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-basedperformance -based equity awards of 78%93.5%, 70%73% and 96%78% for the three years ended December 31, 2018, 20172020, 2019 and 2016,2018, respectively, reflects how the amount of this incentive compensation earned depends on Trustmark’s performance, including compared to its peer companies.
20182020 Say on Pay Vote.In 2018,2020, the advisory shareholder vote on Trustmark’s executive compensation received approval of over 99.0%98.5% of the votes cast on the proposal. In light of such strong support, during the remainder of 20182020 and in 2019,2021, the Committee has continued to apply the same compensation philosophy that was described in the 20182020 proxy statement in determining amounts and types of executive compensation. As described above, the Committee made certain changes in the executive compensation program for 2018 to enhance the competitiveness of executive pay and to better align pay with performance.
Board and Committee Process.In considering appropriate levels of compensation for executives, the Committee takes 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 does not request such
market data from Pearl Meyer every year, and in years when such data is not requested, Trustmark will apply customary aging methods to estimate appropriate updates to 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 reviews all of the 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.
Role of the Compensation ConsultantConsultant..The Committee relies on Pearl Meyer to provide information, analyses and advice to aid in the determination of competitive executive andnon-employee director pay consistent with Trustmark’s compensation philosophy, and periodically engages Pearl Meyer to test Trustmark’spay-for-performance alignment. As described above, in 2017 the Committee engaged Pearl Meyer to prepare a report on market data, the competitiveness of Trustmark’s executive compensation, and alignment of pay with performance. The Committee took this report into
consideration as part of its process for determining compensation for 2018. The Committee has assessed the independence of Pearl Meyer pursuant to SEC and NASDAQNasdaq 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 andnon-employee directors for 2018,2020, Pearl Meyer’s services for the Committee included:
| ● | providing |
| ● | providing recommendations regarding compensation for newly appointed executive officers and certain changes in executive compensation, |
| ● | providing recommendations regarding director compensation, |
| ● | providing recommendations regarding equity vesting practices impacting directors and executives, |
| ● | providing recommendations regarding changes to director and executive stock ownership guidelines, |
| ● | providing input on leadership succession planning for 2020 and 2021, |
| ● | providing recommendations regarding the composition of Trustmark’s peer group, |
|
| ● | reviewing drafts of this Compensation Discussion and Analysis. |
BenchmarkingBenchmarking..When determining the amount and form of compensation for executives, the Committee considers comparative executive compensation information provided by Pearl Meyer that is derived from two primary data sources: peer group data and market data from the banking and financial services industry. The Committee uses peer group data primarily to establish performance goals for long-term incentive awards to assist in the evaluation of itspay-for-performance alignment. The Committee also uses the peer group data and, as applicable, market survey data, to assist with assessing Trustmark’s compensation competitiveness. 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 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. In November 2017, Renasant Corporation and Pinnacle Financial Partners, Inc. were added to
As of December 31, 2019, Trustmark’s peer group because their business profile is similar to Trustmark’s and they exceeded $10 billion in total consolidated assets. The revised peer group resulted in a listconsisted of 20 financial institutions with median assets closer to Trustmark’s size.
As of September 30, 2017, the 2019 peer companies all of which had assets within a range of approximately 74%93% to 224%238% of Trustmark’s asset size, which the Committee considers an appropriate range for comparison purposes. The specific asset sizes for the peer companies listed in the report presented to the Committee in November 2017February 2020 ranged from approximately $10.3$12.6 billion to $31.1$32.2 billion, and the market capitalizations ranged from approximately $2$1.9 billion to $6$7.7 billion. Although Trustmark’s market capitalization and asset size were both substantially 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 2018,2020, Trustmark’s peer group consisted of the following companies:
| Company Name | Ticker | Company Name | Ticker | Company Name | Ticker | |||||||||
BancorpSouth Bank | BXS | Hancock Whitney Corporation | HWC | UMB Financial Corporation | UMBF | |||||||||
|
| Umpqua Holdings Corporation | UMPQ | |||||||||||
Commerce Bancshares, Inc. | CBSH |
| United Bankshares, Inc. | UBSI | ||||||||||
| FFBC | Prosperity Bancshares, Inc. |
| United Community Banks, Inc. | UCBI | |||||||||
|
|
| ||||||||||||
First Midwest Bancorp, Inc. | FMBI |
| Webster Financial Corporation | WBS | ||||||||||
Fulton Financial Corporation | FULT |
| ||||||||||||
Glacier Bancorp, Inc. | GBCI | South State Corporation | SSB | |||||||||||
Market Data.In making its 20182020 compensation recommendations, the Committee considered market data comparisons prepared by Pearl Meyer in August 2017, 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.
Compensation Mix.Compensation Mix. 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 thanone-half of the CEO’s compensation is contingent on performance, and approximatelyone-half of the compensation provided to the other NEOs is contingent on performance. 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. Consistent with its executive compensation philosophy and goals, in 2018,2020, the Committee provided that for the senior-most levels of management 100% of annual cash incentive payments and 50% of long-term equity-based awards would be determined based on achievement of performance targets.
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 20182020 for the CEO and other NEOs (averaged) were as follows:
The compensation elements for the CEO for 20182020 were allocated as follows: 33%28% for base salary, 32%44% for cash bonus, and 35%28% for equity awards. On average, the compensation elements for the other NEOs for 20182020 were allocated as follows: 47%38% for base salary, 29%42% for cash bonus, and 24%20% 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 2018”2020” table on page 27.30.
Base SalariesSalaries..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, althoughmid-year adjustments are made occasionally to reflect changes in responsibility or other developments.
In establishing the CEO’s base salary, the Committee typically considers Pearl 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 NEO, the market data provided by Pearl Meyer for similar positions and a general understanding of executive compensation in the financial services industry. The CEO evaluates the 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.
Effective March 1, 2018,2020, the Board approved a 2% increase in base salary for Messrs.Mr. Host and a 3% base salary increase for Mr. Greer, and the Bank Board approved a 2% increase in base salary for Messrs.Mr. Harvey. Effective January 1, 2020, Mr. Dewey Stevenswas promoted to President and Tyler.Chief Operating Officer of the Bank. His salary change reflects his promotion. The base salaries in effect during 20172019 and 20182020 were as shown below:
| Name | 2018 Base Salaries ($) | 2017 Base Salaries ($) | % Change (%) | 2020 Base Salaries ($ ) | 2019 Base Salaries ($ ) | % Change (%) | ||||||
Gerard R. Host | $774,682 | $759,492 | 2% | $805,980 | $790,176 | 2% | ||||||
Duane A. Dewey | $500,000 | $450,000 | 11% | |||||||||
Louis E. Greer | $382,035 | $374,544 | 2% | $400,000 | $389,676 | 3% | ||||||
Duane A. Dewey | $370,192 | $362,933 | 2% | |||||||||
Wayne A. Stevens | $353,955 | $347,015 | 2% | |||||||||
Robert B. Harvey | $364,140 | $357,000 | 2% | |||||||||
Breck W. Tyler | $318,362 | $312,120 | 2% | $324,729 | $324,729 | 0% | ||||||
Cash BonusesBonuses.. 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.
Annual Management Incentive Plan.At the beginning of each year, Trustmark develops a bonus matrix for the management incentive plan. The performance goals are keyed to various 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. The CEO recommends the bonus matrix 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 such as EPS, net income (NI) (adjusted for significantnon-routine transactions), credit quality measures andnon-interest expense and the weightings to be assigned to the performance measures for each NEO.
As discussed above, for 2018 the Committee decided to replace the previous corporate performance goals of NI and ROATE with a single corporate performance goal of diluted EPS. This change was made because ROATE is also used as a performance measure for the performance-based LTI equity awards and the Committee felt it was appropriate to decrease reliance on this metric. This change also enhanced the alignment of performance measures with Trustmark’s key strategic priorities. In addition, for 2018 the Committee decided to increase target annual cash bonus amounts from 70% to 90% of base salary for the CEO and from 45% to 50% of base salary for other members of the Executive Strategy Committee. These increases made the target total cash compensation of these executives more competitive with the market.
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. The Committee then 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 2018.2020.
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 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 during 2018.2020. 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’s exercise of discretion is intended to ensure the management incentive plan appropriately rewards performance and neither overpays for results nor under rewards accomplishments achieved during the year.
The following are the primary features of the management incentive plan for 2018:2020:
| ● | uses EPS as the sole corporate goal to enhance the alignment of performance measures with Trustmark’s key strategic priorities, |
| ● | includes corporate strategic operational drivers, with a weighting of at least 10% for each goal, |
| ● | for certain executives working in a line of business, includes a line of business performance goal for |
| ● | includes a range of potential payouts from 50% to 200% of target payout level to make the incentive payouts variable relative to performance. |
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 2018:2020:
| 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 | Target Bonus Payout Level (as percentage of salary) | Potential Maximum Bonus Payout Level (as percentage of salary) | ||||||||||||||||||||
Gerard R. Host(2) | --- | 45.0% | 90% | 180% | — | 45.0 | % | 90 | % | 180 | % | |||||||||||||||||
Duane A. Dewey | — | 32.5 | % | 65 | % | 130 | % | |||||||||||||||||||||
Louis E. Greer | --- | 25.0% | 50% | 100% | — | 25.0 | % | 50 | % | 100 | % | |||||||||||||||||
Duane A. Dewey | --- | 25.0% | 50% | 100% | ||||||||||||||||||||||||
Wayne A. Stevens | --- | 25.0% | 50% | 100% | ||||||||||||||||||||||||
Robert B. Harvey | — | 25.0 | % | 50 | % | 100 | % | |||||||||||||||||||||
Breck W. Tyler | --- | 20.0% | 40% | 80% | — | 20.0 | % | 40 | % | 80 | % | |||||||||||||||||
| (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. |
| (2) | Mr. Host’s overall target bonus payout level for 2020 is established in his employment agreement. |
For 2018, overall incentive targets for NEOs were allocated among a corporate performance goal, corporate strategic operational drivers and, for NEOs working in specific lines of business, a line of business goal. The following table shows the weightings of these goals for each NEO for 2018:
| Name | Corporate Performance Goal | Corporate Strategic Operational Drivers | Line of Business Goal | |||
Gerard R. Host | 50% | 50% | --- | |||
Louis E. Greer | 50% | 50% | --- | |||
Duane A. Dewey | 30% | 30% | 40% | |||
Wayne A. Stevens | 30% | 30% | 40% | |||
Breck W. Tyler | 30% | 30% | 40% |
For 2018, 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 2018 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 Goal (all NEOs): | ||||||||
EPS | 85% | 115% | ||||||
Corporate/Strategic Operational Drivers (all NEOs): | ||||||||
Total revenue (net interest income +non-interest income) | 90% | 110% | ||||||
Non-interest expense | 110% | 90% | ||||||
Non-performing assets/total loans + ORE | 120% | 80% | ||||||
Line of Business Goal (Dewey, Stevens and Tyler): | ||||||||
Wealth Management, Insurance, Corporate Banking, | ||||||||
Corporate Real Estate, Houston (Dewey) -- | ||||||||
Net income | 85% | 115% | ||||||
Retail Banking without Texas Region (Stevens) -- | ||||||||
Net income | 85% | 115% | ||||||
Mortgage Services (Tyler) -- | ||||||||
Net income | 85% | 115% | ||||||
Depending on achievement against the stated goals, the payout percentage, if any, for 20182020 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.
For 2020, overall incentive targets for NEOs were allocated among a corporate performance goal, corporate strategic operational drivers and, for NEOs working in specific lines of business unless part of the Executive Strategy Committee, a line of business goal. The following table shows the weightings of these goals for each NEO for 2020:
| Name | Corporate Performance Goal | Corporate Strategic Operational Drivers | Line of Business Goal | ||||||||||||
Gerard R. Host | 50 | % | 50 | % | — | ||||||||||
Duane A. Dewey | 50 | % | 50 | % | — | ||||||||||
Louis E. Greer | 50 | % | 50 | % | — | ||||||||||
Robert B. Harvey | 50 | % | 50 | % | — | ||||||||||
Breck W. Tyler | 30 | % | 30 | % | 40 | % | |||||||||
For 2020, 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 2020 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 Goal (all NEOs): | ||||||||||
EPS | 85 | % | 115 | % | ||||||
Corporate/Strategic Operational Drivers (all NEOs): | ||||||||||
Efficiency Ratio | 110 | % | 90 | % | ||||||
Non-performing assets/total loans + ORE | 120 | % | 80 | % | ||||||
Line of Business Goal (Tyler): | ||||||||||
Mortgage Services | ||||||||||
Net income | 85 | % | 115 | % | ||||||
The following table shows the relevant performance goals established for 20182020 under the management incentive plan and the extent to which such goals were achieved:
| Performance Goals | 2018 Targets | 2018 Results as Approved by the Committee | Percentage of Target Level Achieved | 2020 Targets | 2020 Results as Approved by the Committee | Percentage of Target Level Achieved | |||||||||||||||
| ($ in millions) | |||||||||||||||||||||
Corporate Goal (all NEOs): | |||||||||||||||||||||
EPS | $ 2.21 | $ 2.22 | 100.45% | $ | 2.16 | $ | 2.52 | 116.67 | % | ||||||||||||
Corporate Strategic/Operational Drivers (all NEOs): | |||||||||||||||||||||
Total revenue | $ 600.68 | $ 604.26 | 100.60% | ||||||||||||||||||
(net interest income +non-interest income) | |||||||||||||||||||||
Non-interest expense | $ 404.06 | $ 408.17 | 98.99% | ||||||||||||||||||
Efficiency ratio | 66.67 | % | 64.05 | % | 104.09 | % | |||||||||||||||
Non-performing assets/total loans + ORE | 1.26% | 1.07% | 117.76% | 0.79 | % | 0.73 | % | 108.22 | % | ||||||||||||
Line of Business Goal (Dewey, Stevens and Tyler): | |||||||||||||||||||||
Wealth Management, Insurance, Corporate Banking, | |||||||||||||||||||||
Corporate Real Estate, Houston (Dewey) -- | |||||||||||||||||||||
Line of Business Goal (Tyler): | |||||||||||||||||||||
Mortgage Services | |||||||||||||||||||||
Net income | $ 63.05 | $ 60.61 | 96.13% | $ | 12.88 | $ | 69.45 | 539.21 | % | ||||||||||||
Retail Banking without Texas Region (Stevens) -- | |||||||||||||||||||||
Net income | $ 84.23 | $ 80.12 | 95.12% | ||||||||||||||||||
Mortgage Services (Tyler) -- | |||||||||||||||||||||
Net income | $ 17.43 | $ 17.65 | 101.26% | ||||||||||||||||||
The Committee determined 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 2020 financial performance described above. The bonus amounts for all NEOs were approved by the Committee and by the Bank Board inon February 2019.17, 2021. On or about March 15, 2019,2021, Trustmark will pay the following annual cash bonuses for 20182020 performance under the management incentive plan:
| Name | Total 2018 Annual Cash Bonus Paid ($) | Total Annual Cash Bonus Paid as Percentage of Base Salary(1) (%) | 2018 Payment as Percentage of Target (2) (%) | Total 2020 Annual Cash ($) | Total Annual Cash Bonus Paid as Percentage of (%) | 2020 Payment as Percentage of Target (2) (%) | |||||||||||||||||||
Gerard R. Host | $756,322 | 97.63% | 108.48% | $ | 1,229,684 | 152.57 | % | 169.52% | |||||||||||||||||
Duane A. Dewey | $ | 550,950 | 110.19 | % | 169.52% | ||||||||||||||||||||
Louis E. Greer | $207,216 | 54.24% | 108.48% | $ | 339,040 | 84.76 | % | 169.52% | |||||||||||||||||
Duane A. Dewey | $190,538 | 51.47% | 102.94% | ||||||||||||||||||||||
Wayne A. Stevens | $179,809 | 50.80% | 101.60% | ||||||||||||||||||||||
Robert B. Harvey | $ | 308,645 | 84.76 | % | 169.52% | ||||||||||||||||||||
Breck W. Tyler | $141,926 | 44.58% | 111.45% | $ | 235,948 | 72.66 | % | 181.65% | |||||||||||||||||
| (1) | Calculated using base salary as of March 1, |
| (2) | Performance achieved can range from 0% to a maximum of 200%, with target performance achievement being 100%. If performance achievement is below the threshold for an NEO, no bonus is earned under the plan absent exercise of discretion by the Committee. |
These 20182020 annual cash bonus amounts are presented asNon-Equity Incentive Plan Compensation for 20182020 in the “Summary Compensation Table for 2018”2020” on page 26,29, including Mr. Tyler’s mortgage production bonus.bonus of $300,000.
Discretionary Bonuses. During 2020, Mr. Harvey completed the implementation of amendments to FASB-AU 2016-13 for the new accounting standard commonly referred to as Current Expected Credit Losses (CECL) as issued by the Financial Accounting Standards Board (FASB). In recognition of his leadership in managing external and internal resources to design, model, validate, and implement the CECL methodology, and in light of the substantial complexity resulting in the successful implementation of CECL, the Board approved payment of a one-time discretionary bonus to Mr. Harvey in the amount of $25,000, which was paid in August 2020. In addition, the Committee recommended a discretionary payment of an additional $25,000 to Mr. Harvey in recognition of his management of the Payroll Protection Program during 2020. These 2020 discretionary bonus amounts are presented as Bonus for 2020 in the “Summary Compensation Table for 2020” on page 29.
Mortgage Production Bonus.BonusIn recognition. Recognizing 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’sdivision’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.
Equity-Based Compensation.Equity-based awards generally constitute the largestnon-cash component of each NEO’s total compensation package. InPearl Meyer provides the Committee with peer company data and published surveys to assist the Committee in setting the amount of annual equity-based awards. For 2020, Messrs. Host and Dewey received annual equity-based awards the Committee takes into account levels of long-term equity-based compensationtailored to their positions as CEO and pay mix data at its peer companies using published surveys, based on input from Pearl Meyer.COO. All other members of the Executive Strategy Committee (other than the CEO), which includes Messrs. Greer, Dewey and Stevens, receivereceived the same annual equity-based award and, all other members of executive management receivereceived the same, but 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 are recommended by the Committee and approved by the Board generally during the first quarter of each year. Awards are typically made as early as practicable in the year to maximize the time-period for achieving performance goals associated with the awards. Equity-based awards are
granted under the Trustmark Corporation Amended and Restated Stock and Incentive Compensation Plan (Amended and Restated Stock Plan).
For 2018, as discussed above annual LTIlong-term equity awards were increased from $650,000 to $800,000 for the CEO and
from $150,000 to $200,000 for other members of the Executive Strategy Committee, in order to make this component of compensation more competitive with market levels. This change also increased the overall portion of executives’ total compensation that is incentive-based. In addition, for 2018, the Committee determined that one of the metrics used for performance-based awards, ROATE, will be measured against an absolute target value set by the Committee instead of comparing it to the peer group. This change was intended to enhance the incentive effect of the award by increasing the opportunity for executives to directly affect the outcome.
For LTI(LTI) awards made in 2018,2020, performance-based equity awards and time-based equity awards each represented 50% of the total award. 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 time-based restrictedequity awards, which have a three-year cliff vesting feature, promote an important goal of executive 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, provide 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.
Performance-basedPerformance Awards.The 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.units (known as achievement units). The restricted stock vestsperformance period began January 1, 2020, and continues through December 31, 2022. Consistent with past years, the performance units and achievement units vest based on the achievement of company performance goals related to ROATE and TSR over a three-year period upperiod. The performance units vest to the extent the aggregate vesting percentage ranges from 0% to 100%, and the restricted stockachievement units vest based on performance overto the same three-year 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.
The performance-based restricted stock and restricted stock unit awards granted in 2018 vest based on the achievement of target percentages related to ROATE (50%), compared to an absolute target level of ROATE over a three-year performance period, and TSR (50%), compared to the TSR for Trustmark’s peer group over the same three-year period. The performance goals are scaled so that the recipient can receive a partial award in the event that acceptable, but not the target, results are achieved and so that performance above the target level yields higher awards. For ROATE, the threshold performance level is reached upon achieving 80% of target, with 50% vesting occurring upon achieving 100% of target and 100% vesting occurring upon achieving 120% of target. For TSR, the threshold 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. The performance period began January 1, 2018, and continues through December 31, 2020. 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, the restricted stock unit portion of the award will be earned to the extent of such vesting above 100%. Any restricted stock units earned will be settled or issued during the first 2 1/2 months of 2021.
The executive generally must 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). Dividend equivalents are accumulated on the performance units, but not the achievement unit portion of the award. No interest is paid on accumulated dividend equivalents.
As noted above, the accumulated dividends. No dividend equivalentsperformance goals of ROATE and TSR are accumulatedmeasured over a three-year performance period. The performance target of ROATE is established on the date of grant and 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 | 80% | 25.00% | 100% | 50% | 120% | 100% | |||||||||||||||||||||||||||||||||||||||
(3 year average - actual to performance target) | |||||||||||||||||||||||||||||||||||||||||||||
TSR Ranking | 30th percentile | 17.50% | 50th percentile | 50% | 75th percentile | 100% | |||||||||||||||||||||||||||||||||||||||
(as a percentile compared to Peers) | |||||||||||||||||||||||||||||||||||||||||||||
Aggregate Vesting Attained | 42.50% | 100% | 200% | ||||||||||||||||||||||||||||||||||||||||||
Prior to 2020, Trustmark granted performance-based equity awards consisting of a dual award of restricted stock unit portionand an equal number of the award.achievement units. These awards have attributes similar to those described above.
Time-based Awards.The time-based awardsunits granted in 20182020 vest 100% at February 15, 2021,19, 2023, if the executive remains employed through such date (subject to certain exceptions). DividendsDividend equivalents on any time-based restricted stock units are accumulated and will vest and be paid only when and to the extent the shares to which they relate vest, subject to asix-month delay when required by Section 409A. In 2020, time-based awards were enhanced to provide for additional vesting upon retirement at or after age 65 with the consent of the Human Resources Committee. Retirement of the executive prior to the first anniversary of the grate 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 2018:2020:
| Name | Value of Performance-Based Shares ($) | Value of Performance-Based RSUs(1) ($) | Value of Time-Based Shares ($) | Total ($) | Value of Performance Units ($) | Value of Achievement Units (1) ($) | Value of Time-Based RSUs ($) | Total ($) | ||||||||||||||||||||||
Gerard R. Host | $408,989 | --- | $ 409,373 | $ 818,362 | $ | 395,651 | --- | $ | 395,780 | $ | 791,431 | |||||||||||||||||||
Duane A. Dewey | $ | 173,092 | --- | $ | 173,162 | $ | 346,254 | |||||||||||||||||||||||
Louis E. Greer | $102,271 | --- | $ 102,335 | $ 204,606 | $ | 98,937 | --- | $ | 98,945 | $ | 197,882 | |||||||||||||||||||
Duane A. Dewey | $102,271 | --- | $ 102,335 | $ 204,606 | ||||||||||||||||||||||||||
Wayne A. Stevens | $102,271 | --- | $ 102,335 | $ 204,606 | ||||||||||||||||||||||||||
Robert B. Harvey | $ | 98,937 | --- | $ | 98,945 | $ | 197,882 | |||||||||||||||||||||||
Breck W. Tyler | $61,369 | --- | $ 61,395 | $ 122,764 | $ | 59,349 | --- | $ | 59,373 | $ | 118,722 | |||||||||||||||||||
| (1) | Reflects the anticipated earning of the |
The following table reflects the values realized by the NEOs on vesting of performance-based restricted stock awards and time-based restricted stock awards that vested during 20182020 from grants made in prior years. See the “Option Exercises and Stock Vested for 2018”2020” table on page 3033 for more information.
| Name | Value of Performance-Based Shares Vested(1) ($) | Value of Time-Based Shares Vested (2) ($) | Total ($) | Value of Performance-Based Shares Vested (1) ($) | Value of Time-Based Shares Vested (2) ($) | Total ($) | ||||||||||||||
Gerard R. Host | $425,975 | $306,999 | $732,974 | $ 302,541 | $ 205,857 | $ 508,398 | ||||||||||||||
Duane A. Dewey | $ 69,817 | $ 47,518 | $ 117,335 | |||||||||||||||||
Louis E. Greer | $ 98,292 | $ 70,868 | $169,160 | $ 69,817 | $ 47,518 | $ 117,335 | ||||||||||||||
Duane A. Dewey | $ 98,292 | $ 70,868 | $169,160 | |||||||||||||||||
Wayne A. Stevens | $ 98,292 | $ 70,868 | $169,160 | |||||||||||||||||
Robert B. Harvey | $ 69,817 | $ 47,518 | $ 117,335 | |||||||||||||||||
Breck W. Tyler | $ 78,627 | $ 56,695 | $135,322 | $ 55,886 | $ 38,001 | $ 93,887 | ||||||||||||||
| (1) | Reflects |
| (2) | Reflects vesting of time-based shares granted in |
Retirement Benefits.Trustmark maintains certain plans providing retirement benefits in which the NEOs and certain other associates participate, as described below.
Executive Deferral Plan.Because of the limits for tax qualified retirement plans, Trustmark maintains a defined benefit supplemental retirement plan (Executive Deferral Plan) that provides additional retirement benefits to selected executives. The Committee believes the plan is competitive with Trustmark’s peer financial institutions and is an important tool in attracting and retaining executive management.
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 ten years, and commences at normal retirement age, which is 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 andpre-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 anticipated to be paid at normal retirement:
| Name | Annual Benefit ($) | ||||
Gerard R. Host | $ | 300,000 | |||
Duane A. Dewey | $ | 100,000 | |||
Louis E. Greer | $ | 100,000 | |||
| $ | 100,000 | |||
| |||||
Breck W. Tyler | $ | 100,000 | |||
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 apre-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 ten 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.
In 2019, Mr. Host became eligible for payments under the Executive Deferral Plan. However, the plan provides that payments shall be delayed if such payments would not be deductible under Section 162(m) of the Internal Revenue Code. As a result, payments to Mr. Host for 2019 and 2020 were delayed.
See the “Pension Benefits for 2018”2020” table on page 3134 for more information regarding this plan.
Non-Qualified Deferred Compensation Plan.Trustmark also provides aNon-Qualified Deferred Compensation Plan (the NQDC Plan) that provides additional cash compensation deferral opportunities for executives who are impacted by the compensation and contribution limits that restrict participation in Trustmark’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 apre-tax basis up to 90% of annual base salary and/or cash bonus. No contribution is made to this plan by Trustmark. Each executive’s deferred
income 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 executive. Distributions can be received under this plan upon retirement, death, long-term disability, termination of employment or during employment at specified dates.
In 2020, Mr. Host 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 distribution to Mr. Host for 2020 was delayed.
See the“Non-Qualified Deferred Compensation for 2018”2020” table on page 3134 for more information regarding this plan and see the “Summary Compensation Table for 2018” table2020” on page 2629 and the “All Other Compensation for 2018”2020” table on page 2730 for more information regarding Trustmark’s contribution to Trustmark’s 401(k) Plan.
Perquisites; Other Benefits.Perquisites provided to each NEO are reviewed annually within the context of Trustmark’s executive compensation program, market practices and the nature of each NEO’sNEO’ s responsibilities. Generally, Trustmark limits the types of perquisites offered to NEOs as shown in the “All Other Compensation for 2018”2020” table on page 27.30.
The Committee believes the currently-offered perquisites are minimal in overall cost and competitively necessary to attract and 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.Messrs. Host and Dewey 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.automobile. In addition, the Board authorizes an annual allowance of up to 15 hours and 10 hours of personal use of Trustmark’s airplane for the Executive Chairman and CEO, respectively, which provides an efficient way to maximize hiseach executive’s available time for company business.
Severance and Change in Control Benefits.Upon any termination of employment, NEOs would be entitled to receive their vested benefits under the 401(k) 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 acceleratedaccele rated 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 written agreements.agreement s. The Committee further believes that providing change in control benefits to the CEO and other NEOs should eliminate any reluctance to pursue potential change in control transactions that may be in the best interests of shareholders. Trustmark also believes that the severance and change in control benefits it provides are customary among its 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 NEOs 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 taxgross-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 moreafter-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 33.36.
Deductibility of Compensation.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 2018,2020, a portion of Mr.Messrs. Host’s and 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 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, Executive Chairman and other members of executive management of the Bank to own, aat minimum, the number of shares of Trustmark stock equal in value to a multiple of their base salary in effect when appointed CEO or a membersalary.
The guidelines as of executive management,January 1, 2021 are as follows:
| Multiple of Base Salary | ||
CEO | ||
Executive Chairman | 5x | |
Executive Strategy Committee | 2x | |
Other Executive Management | 1.5x | |
The guidelines provide thatcalculate the applicable ownership level shouldnumber of shares to be reached within five years fromowned by reference to an executive’s base salary as of March 1 of each year and the date10-day trading average share price through March 31 each year. Shares of appointmentunvested time-based restricted stock are counted as CEO or as a membershares owned for purposes of the executive strategy committee or executive management, as applicable.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 2018, all NEOs own2020, Messrs. Host, Greer and Tyler owned the minimum number of shares required to satisfy the guideline.guidelines. Mr. Dewey is expected to satisfy the stock ownership guidelines, over time, which increased as a result of his new position as CEO. Mr. Harvey is expected to satisfy the stock ownership guidelines as of March 1, 2021.
Executive Compensation Recoupment.Since 2011, the Committee has included clawback provisions in performance-based restricted stockperformance awards and the management incentive plan with respect to annual cash bonuses that may be earned under the plan. Under these provisions, any performance-based restricted stockperformance 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 if the SEC publishes final rules implementing the clawback requirements under the Dodd-Frank Act.
Analysis of Risk Associated with Trustmark’s Compensation Policies and Practices.In late 20182020 and early 2019,2021, the Committee, together with Trustmark’s risk officers, conducted anin-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, General Counsel and Chief Risk Officer & General Counsel presented the risk officers’ conclusions and
supporting materials to the Committee, which reviewed and discussed the analysis at its meeting on February 13, 2019.16, 2021.
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-basedequity -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-takingrisk -taking behavior and are consistent with maintaining the organization’s safety and soundness.
Summary Compensation Table for 20182020
The following table summarizes the compensation components for the CEO, the CFO and each of the next three most highly compensated executive officers during 20182020 and indicates their positions as of December 31, 2018.2020. 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 andNon-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.
| Change in | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pension Value | Change in | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| and Non- | Pension Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Qualified | and Non- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock | Option | Non-Equity | Deferred | All Other | Non-Equity | Qualified | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bonus | Awards | Awards | Incentive Plan | Compensation | Compensation | Option | Incentive Plan | Deferred | All Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name and Principal | Salary | (1) | (2) | (3) | Compensation (4) | Earnings (5) | (6) | Total | Bonus | Stock | Awards | Compensation | Compensation | Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||
| Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | Salary | (1) | Awards (2) | (3) | (4) | Earnings (5) | (6) | Total | ||||||||||||||||||||||||||||||||||||||||||||||
| Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gerard R. Host | 2018 | $ 772,150 | --- | $ 818,362 | --- | $ 756,322 | --- | $ 75,746 | $ 2,422,580 | 2020 | $ | 803,346 | --- | $ | 791,431 | --- | $ | 1,229,684 | $ | 638,447 | $ | 153,434 | $ | 3,616,342 | |||||||||||||||||||||||||||||||||||||||
President and CEO, | 2017 | $ 757,010 | --- | $ 652,243 | --- | $ 782,732 | $ 319,574 | $ 79,603 | $ 2,591,162 | 2019 | $ | 787,594 | $ | 13,889 | $ | 818,183 | --- | $ | 700,254 | $ | 660,550 | $ | 114,795 | $ | 3,095,265 | ||||||||||||||||||||||||||||||||||||||
Trustmark | 2016 | $ 742,167 | --- | $ 639,941 | --- | $ 547,579 | $ 162,577 | $ 78,684 | $ 2,170,948 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporation; | 2018 | $ | 772,150 | --- | $ | 818,362 | --- | $ | 756,322 | --- | $ | 75,746 | $ | 2,422,580 | |||||||||||||||||||||||||||||||||||||||||||||||||
President and CEO, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CEO, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trustmark National | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Louis E. Greer | 2018 | $ 380,787 | --- | $ 204,606 | --- | $ 207,216 | $ 15,453 | $ 33,080 | $ 841,142 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasurer and | 2017 | $ 373,320 | --- | $ 150,531 | --- | $ 248,173 | $ 142,780 | $ 31,670 | $ 946,474 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Duane A. Dewey (9) | 2020 | $ | 500,001 | --- | $ | 346,254 | --- | $ | 550,950 | $ | 210,606 | $ | 41,988 | $ | 1,649,799 | ||||||||||||||||||||||||||||||||||||||||||||||||
President and Chief | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating | 2019 | $ | 450,000 | --- | $ | 306,839 | --- | $ | 265,905 | $ | 251,586 | $ | 34,196 | $ | 1,308,526 | ||||||||||||||||||||||||||||||||||||||||||||||||
Officer, Trustmark | 2018 | $ | 368,982 | --- | $ | 204,606 | --- | $ | 190,538 | $ | -- | $ | 31,627 | $ | 795,753 | ||||||||||||||||||||||||||||||||||||||||||||||||
National Bank | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Louis E. Greer (8) | 2020 | $ | 398,279 | --- | $ | 197,882 | --- | $ | 339,040 | $ | 77,129 | $ | 35,073 | $ | 1,047,403 | ||||||||||||||||||||||||||||||||||||||||||||||||
Treasurer, | 2019 | $ | 388,403 | --- | $ | 204,571 | --- | $ | 191,876 | $ | 275,726 | $ | 34,232 | $ | 1,094,808 | ||||||||||||||||||||||||||||||||||||||||||||||||
Principal Financial | 2016 | $ 366,000 | --- | $ 147,689 | --- | $ 173,575 | $ 105,112 | $ 30,340 | $ 822,716 | 2018 | $ | 380,787 | --- | $ | 204,606 | --- | $ | 207,216 | $ | 15,453 | $ | 33,080 | $ | 841,142 | |||||||||||||||||||||||||||||||||||||||
Officer, Trustmark | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Officer and Principal | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Officer, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trustmark | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporation; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chief Financial | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Officer, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trustmark National | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Duane A. Dewey(7) | 2018 | $ 368,982 | --- | $ 204,606 | --- | $ 190,538 | --- | $ 31,627 | $ 795,753 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
President of | 2017 | $ 361,747 | --- | $ 150,531 | --- | $ 164,590 | $ 97,565 | $ 30,340 | $ 804,773 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate Banking, | 2016 | $ 354,654 | $ 10,000 | $ 147,689 | --- | $ 132,150 | $ 46,976 | $ 28,688 | $ 720,157 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trustmark National | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wayne A. Stevens | 2018 | $ 352,798 | --- | $ 204,606 | --- | $ 179,809 | --- | $ 40,166 | $ 777,379 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
President-Retail | 2017 | $ 345,881 | --- | $ 150,531 | --- | $ 212,096 | $ 76,850 | $ 34,425 | $ 819,783 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking, Trustmark | 2016 | $ 339,099 | --- | $ 147,689 | --- | $ 157,382 | $ 54,751 | $ 38,704 | $ 737,625 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Robert B. Harvey | 2020 | $ | 362,950 | $ | 50,000 | $ | 197,882 | --- | $ | 308,645 | $ | 236,474 | $ | 25,709 | $ | 1,181,660 | |||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and Chief | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Officer, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trustmark | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
National Bank | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Breck W. Tyler | 2018 | $ 317,322 | --- | $ 122,764 | --- | $ 322,231 | --- | $ 21,125 | $ 783,442 | 2020 | $ | 324,729 | --- | $ | 118,722 | --- | $ | 535,948 | $ | 229,166 | $ | 22,266 | $ | 1,230,831 | |||||||||||||||||||||||||||||||||||||||
President-Mortgage | 2017 | $ 311,100 | --- | $ 120,445 | --- | $ 385,168 | $ 91,907 | $ 20,667 | $ 929,287 | 2019 | $ | 323,668 | $ | 45,000 | $ | 122,736 | --- | $ | 329,559 | $ | 254,493 | $ | 21,346 | $ | 1,096,802 | ||||||||||||||||||||||||||||||||||||||
Services, Trustmark | 2016 | $ 306,000 | --- | $ 118,151 | --- | $ 411,568 | $ 75,353 | $ 20,668 | $ 931,740 | 2018 | $ | 317,322 | --- | $ | 122,764 | --- | $ | 322,231 | --- | $ | 21,125 | $ | 783,442 | ||||||||||||||||||||||||||||||||||||||||
| National Bank | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | No discretionary |
| (2) | The amounts in this column reflect restricted stock and restricted stock unit awards granted to the NEOs during |
| 2018 | 2017 | 2016 | 2020 | 2019 | 2018 | |||||||
Host | $587,145 | $644,020 | $661,816 | $588,113 | $672,950 | $587,145 | ||||||
Dewey | $257,291 | $252,390 | $146,821 | |||||||||
Greer | $146,821 | $148,620 | $152,732 | $147,064 | $168,279 | $146,821 | ||||||
Dewey | $146,821 | $148,620 | $152,732 | |||||||||
Stevens | $146,821 | $148,620 | $152,732 | |||||||||
Harvey | $147,064 | --- | --- | |||||||||
Tyler | $ 88,101 | $118,946 | $122,179 | $ 88,219 | $100,945 | $ 88,101 | ||||||
Assumptions used in the calculation of these amounts are included in Note 16 to Trustmark’s audited financial statements for the year ended December 31, |
| (3) | No stock option awards were made during |
| (4) | This column shows the value of annual cash bonuses earned under Trustmark’s management incentive plan.Non-equity incentive plan compensation for Mr. Tyler includes both his annual cash bonus earned under Trustmark’s management incentive plan and his quarterly mortgage department production bonus incentives. |
| (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, |
|
| (6) | See the following table for details of all other compensation for |
| (7) | Mr. Host became Executive Chairman of Trustmark and the Bank effective January 1, 2021. |
| (8) | Mr. Greer retired as Treasurer, Principal Financial Officer and Principal Accounting Officer of Trustmark and Executive Vice President and CFO of the Bank effective March 1, 2021. |
| (9) | Mr. Dewey |
All Other Compensation for 20182020
The detail of all other compensation for 20182020 is included in the following table:
| Dividends on | ||||||||||||||||||||||||||||||||||||||||||
| Use of | Automobile Allowance/Use of | Unvested Time- Based | ||||||||||||||||||||||||||||||||||||||||
| Company | Company-Provided | Restricted | Club | 401(k) | ||||||||||||||||||||||||||||||||||||||
| Airplane (1) | Automobile (2) | Stock (3) | Dues | Match | Total | |||||||||||||||||||||||||||||||||||||
| Name | ($) | ($) | ($) | ($) | ($) | ($) | Use of Company Airplane (1) ($) | Automobile Allowance/Use of Company-Provided Automobile (2) ($) | Dividends on Unvested Time- Based Restricted Stock (3) ($) | Club Dues ($) | 401(k) Match ($) | Total ($) | ||||||||||||||||||||||||||||||
Gerard R. Host | $ 20,955 | $ 2,419 | $ 27,264 | $ 8,608 | $ 16,500 | $ 75,746 | $ | 83,558 | $ | 9,664 | $ | 34,438 | $ | 8,674 | $ | 17,100 | $ | 153,434 | ||||||||||||||||||||||||
Duane A. Dewey | --- | $ | 4,054 | $ | 12,150 | $ | 8,684 | $ | 17,100 | $ | 41,988 | |||||||||||||||||||||||||||||||
Louis E. Greer | --- | --- | $ 6,519 | $ 10,061 | $ 16,500 | $ 33,080 | --- | --- | $ | 8,609 | $ | 9,364 | $ | 17,100 | $ | 35,073 | ||||||||||||||||||||||||||
Duane A. Dewey | --- | --- | $ 6,519 | $ 8,608 | $ 16,500 | $ 31,627 | ||||||||||||||||||||||||||||||||||||
Wayne A. Stevens | --- | $ 8,529 | $ 6,519 | $ 8,618 | $ 16,500 | $ 40,166 | ||||||||||||||||||||||||||||||||||||
Robert B. Harvey | --- | --- | $ | 8,609 | --- | $ | 17,100 | $ | 25,709 | |||||||||||||||||||||||||||||||||
Breck W. Tyler | --- | --- | $ 4,625 | --- | $ 16,500 | $ 21,125 | --- | --- | $ | 5,166 | --- | $ | 17,100 | $ | 22,266 | |||||||||||||||||||||||||||
| (1) | The aggregate incremental cost of Mr. Host’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. Host used the company airplane for personal use to determine Trustmark’s aggregate incremental cost. |
| (2) | The aggregate incremental cost of Messrs. Host’s and |
| (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 |
Grants of Plan-Based Awards for 20182020
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, 2018,2020, 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:
| All Other | All Other | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock | Option | All Other Stock Awards: Number of | All Other Option Awards: | Exercise | Grant Date Fair | |||||||||||||||||||||||||||||||||||||||||||||||
| Awards: | Awards: | Exercise | Grant Date | Estimated Future Payouts | Shares | Number of | or Base | Value of | ||||||||||||||||||||||||||||||||||||||||||||
| Estimated Possible Payouts | Estimated Future Payouts | Number of | Number of | or Base | Fair Value | Estimated Possible Payouts | Under Equity Incentive | of | Securities | Price of | Stock and | |||||||||||||||||||||||||||||||||||||||||
| UnderNon-Equity Incentive Plan | Under Equity Incentive | Shares of | Securities | Price of | of Stock | Under Non-Equity Incentive Plan Awards (1) | Plan Awards (2) | Stock or | Underlying | Option | Option | |||||||||||||||||||||||||||||||||||||||||
| Awards (1) | Plan Awards (2) | Stock or | Underlying | Option | and Option | Units | Awards | |||||||||||||||||||||||||||||||||||||||||||||
| Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Units(3) | Options | Awards | Awards (4) | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | (3) | Options | Awards | (4) | |||||||||||||||||||||||||||||||
Name | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($) | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($) | ||||||||||||||||||||||||||||||
Gerard R. Host | $348,607 | $697,214 | $1,394,428 | --- | --- | --- | --- | --- | --- | --- | $362,691 | $725,382 | $1,450,764 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||
| 2/19/2020 | --- | --- | --- | 2,165 | 12,373 | 24,746 | --- | --- | --- | $395,651 | ||||||||||||||||||||||||||||||||||||||||||
| 2/19/2020 | --- | --- | --- | --- | --- | --- | 12,372 | --- | --- | $395,780 | ||||||||||||||||||||||||||||||||||||||||||
Duane A. Dewey | $162,500 | $325,001 | $ 650,002 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||||||||||||
| 2/19/2020 | --- | --- | --- | 947 | 5,413 | 10,826 | --- | --- | --- | $173,092 | ||||||||||||||||||||||||||||||||||||||||||
| 2/15/2018 | --- | --- | --- | 2,245 | 12,829 | 25,658 | --- | --- | --- | $408,989 | 2/19/2020 | --- | --- | --- | --- | --- | --- | 5,413 | --- | --- | $173,162 | |||||||||||||||||||||||||||||||
| 2/15/2018 | --- | --- | --- | --- | --- | --- | 12,829 | --- | --- | $409,373 | ||||||||||||||||||||||||||||||||||||||||||
Louis E. Greer | $ 95,509 | $ 191,018 | $382,035 | --- | --- | --- | --- | --- | --- | --- | $100,000 | $200,000 | $ 400,000 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||
| 2/15/2018 | --- | --- | --- | 562 | 3,208 | 6,416 | --- | --- | --- | $102,271 | ||||||||||||||||||||||||||||||||||||||||||
| 2/15/2018 | --- | --- | --- | --- | --- | --- | 3,207 | --- | --- | $102,335 | 2/19/2020 | --- | --- | --- | 541 | 3,094 | 6,188 | --- | --- | --- | $ 98,937 | |||||||||||||||||||||||||||||||
Duane A. Dewey | $ 92,548 | $ 185,096 | $370,192 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||||||||||||
| 2/15/2018 | --- | --- | --- | 562 | 3,208 | 6,416 | --- | --- | --- | $102,271 | ||||||||||||||||||||||||||||||||||||||||||
| 2/15/2018 | --- | --- | --- | --- | --- | --- | 3,207 | --- | --- | $102,335 | 2/19/2020 | --- | --- | --- | --- | --- | --- | 3,093 | --- | --- | $ 98,945 | |||||||||||||||||||||||||||||||
Wayne A. Stevens | $ 88,489 | $ 176,978 | $353,956 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||||||||||||
Robert B. Harvey | $ 91,035 | $182,070 | $ 364,140 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||||||||||||
| 2/19/2020 | --- | --- | --- | 541 | 3,094 | 6,188 | --- | --- | --- | $ 98,937 | ||||||||||||||||||||||||||||||||||||||||||
| 2/15/2018 | --- | --- | --- | 562 | 3,208 | 6,416 | --- | --- | --- | $102,271 | 2/19/2020 | --- | --- | --- | --- | --- | --- | 3,093 | --- | --- | $ 98,945 | |||||||||||||||||||||||||||||||
| 2/15/2018 | --- | --- | --- | --- | --- | --- | 3,207 | --- | --- | $102,335 | ||||||||||||||||||||||||||||||||||||||||||
Breck W. Tyler | $ 63,672 | $ 127,345 | $ 254,690 | --- | --- | --- | --- | --- | --- | --- | $ 64,946 | $129,892 | $ 259,784 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||
| --- | --- | $ 250,000 | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||||||||||||||||||||||||||||
| 2/15/2018 | --- | --- | --- | 337 | 1,925 | 3,850 | --- | --- | --- | $61,369 | --- | --- | $ 300,000 | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||
| 2/15/2018 | --- | --- | --- | --- | --- | --- | 1,924 | --- | --- | $61,395 | ||||||||||||||||||||||||||||||||||||||||||
| 2/19/2020 | --- | --- | --- | 325 | 1,856 | 3,712 | --- | --- | --- | $ 59,349 | ||||||||||||||||||||||||||||||||||||||||||
| 2/19/2020 | --- | --- | --- | --- | --- | --- | 1,856 | --- | --- | $ 59,373 | ||||||||||||||||||||||||||||||||||||||||||
| (1) | The amounts shown in these columns reflect possible payouts under the annual management incentive plan for |
| (2) | Reflects the |
| (3) | Reflects the number of time-based |
| (4) | The amounts in this column reflect the grant date fair value of the |
Outstanding Equity Awards at 20182020 FiscalYear-End
The following table presents information regarding unvested performance-based restricted stock and restricted stock unit awards and time-based restricted stockequity awards held by NEOs at December 31, 2018.2020. 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, 2018.2020.
Stock Awards | Stock Awards | ||||||||||||||||||||||||||||||||||
| Equity Incentive | Equity Incentive | ||||||||||||||||||||||||||||||||||
| Equity Incentive | Plan Awards: | Equity Incentive | Plan Awards: | ||||||||||||||||||||||||||||||||
| Plan Awards: | Market or Payout | Plan Awards: | Market or Payout | ||||||||||||||||||||||||||||||||
| Number of | Market Value of | Number of | Value of Unearned | Number of | Market Value of | Number of | Value of Unearned | ||||||||||||||||||||||||||||
| Shares or Units of | Shares or Units of | Unearned Shares, Units | Shares, Units or Other | Shares or Units of | Shares or Units of | Unearned Shares, Units | Shares, Units or Other | ||||||||||||||||||||||||||||
| Stock That Have | Stock That Have | or Other Rights That | Rights That Have Not | Stock That Have | Stock That Have | or Other Rights That | Rights That Have Not | ||||||||||||||||||||||||||||
| Not Vested(1) | Not Vested(2) | Have Not Vested(1) | Vested(2) | Not Vested (1) | Not Vested (2) | Have Not Vested (1) | Vested (2) | ||||||||||||||||||||||||||||
| Name | Grant Date | (#) | ($) | (#) | ($) | Grant Date | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||
Gerard R. Host | 1/26/2016(3) | 10,403 | $ 295,757 | --- | --- | 2/15/2018 | (3) | 12,829 | $ | 350,360 | --- | --- | |||||||||||||||||||||||
| 2/15/2018 | (4) | --- | --- | 11,995 | $ | 327,583 | |||||||||||||||||||||||||||||
| 2/14/2019 | (3) | 12,232 | 334,056 | --- | --- | ||||||||||||||||||||||||||||||
| 2/14/2019 | (5) | --- | --- | 12,233 | 334,083 | ||||||||||||||||||||||||||||||
| 2/19/2020 | (3) | 12,372 | 337,879 | --- | --- | ||||||||||||||||||||||||||||||
| 2/19/2020 | (6) | --- | --- | 12,373 | 337,907 | ||||||||||||||||||||||||||||||
| 37,433 | $ | 1,022,295 | 36,601 | $ | 999,573 | ||||||||||||||||||||||||||||||
Duane A. Dewey | 2/15/2018 | (3) | 3,207 | $ | 87,583 | --- | --- | ||||||||||||||||||||||||||||
| 2/15/2018 | (4) | --- | --- | 2,999 | $ | 81,903 | |||||||||||||||||||||||||||||
| 2/14/2019 | (3) | 4,587 | 125,271 | --- | --- | ||||||||||||||||||||||||||||||
| 2/14/2019 | (5) | --- | --- | 4,588 | 125,298 | ||||||||||||||||||||||||||||||
| 1/26/2016(4) | --- | --- | 16,474 | $ 468,356 | 2/19/2020 | (3) | 5,413 | 147,829 | --- | --- | |||||||||||||||||||||||||
| 2/16/2017(3) | 6,403 | $ 182,037 | --- | --- | |||||||||||||||||||||||||||||||
| 2/16/2017(5) | --- | --- | 13,000 | $ 369,590 | 2/19/2020 | (6) | --- | --- | 5,413 | 147,829 | |||||||||||||||||||||||||
| 2/15/2018(3) | 12,829 | $ 364,728 | --- | --- | |||||||||||||||||||||||||||||||
| 2/15/2018(6) | --- | --- | 12,829 | $ 364,728 | 13,207 | $ | 360,683 | 13,000 | $ | 355,030 | |||||||||||||||||||||||||
| 29,635 | $ 842,522 | 42,303 | $ 1,202,674 | ||||||||||||||||||||||||||||||||
Louis E. Greer | 1/26/2016(3) | 2,401 | $ 68,260 | --- | --- | 2/15/2018 | (3) | 3,207 | $ | 87,583 | --- | --- | |||||||||||||||||||||||
| 1/26/2016(4) | --- | --- | 3,802 | $ 108,091 | |||||||||||||||||||||||||||||||
| 2/16/2017 (3) | 1,478 | $ 42,020 | --- | --- | 2/15/2018 | (4) | --- | --- | 2,999 | $ | 81,903 | ||||||||||||||||||||||||
| 2/16/2017(5) | --- | --- | 3,000 | $ 85,290 | |||||||||||||||||||||||||||||||
| 2/15/2018 (3) | 3,207 | $ 91,175 | --- | --- | 2/14/2019 | (3) | 3,058 | 83,514 | --- | --- | |||||||||||||||||||||||||
| 2/15/2018(6) | --- | --- | 3,208 | $ 91,203 | |||||||||||||||||||||||||||||||
| 7,086 | $ 201,455 | 10,010 | $ 284,584 | 2/14/2019 | (5) | --- | --- | 3,059 | 83,541 | ||||||||||||||||||||||||||
Duane A. Dewey | 1/26/2016(3) | 2,401 | $ 68,260 | --- | --- | ||||||||||||||||||||||||||||||
| 1/26/2016(4) | --- | --- | 3,802 | $ 108,091 | |||||||||||||||||||||||||||||||
| 2/16/2017 (3) | 1,478 | $ 42,020 | --- | --- | 2/19/2020 | (3) | 3,093 | 84,470 | --- | --- | |||||||||||||||||||||||||
| 2/16/2017(5) | --- | --- | 3,000 | $ 85,290 | |||||||||||||||||||||||||||||||
| 2/15/2018 (3) | 3,207 | $ 91,175 | --- | --- | 2/19/2020 | (6) | --- | --- | 3,094 | 84,497 | |||||||||||||||||||||||||
| 2/15/2018(6) | --- | --- | 3,208 | $ 91,203 | |||||||||||||||||||||||||||||||
| 7,086 | $ 201,455 | 10,010 | $ 284,584 | 9,358 | $ | 255,567 | 9,152 | $ | 249,941 | ||||||||||||||||||||||||||
Wayne A. Stevens | 1/26/2016(3) | 2,401 | $ 68,260 | --- | --- | ||||||||||||||||||||||||||||||
Robert B. Harvey | 2/15/2018 | (3) | 3,207 | $ | 87,583 | --- | --- | ||||||||||||||||||||||||||||
| 2/15/2018 | (4) | --- | --- | 2,999 | $ | 81,903 | |||||||||||||||||||||||||||||
| 2/14/2019 | (3) | 3,058 | 83,514 | --- | --- | ||||||||||||||||||||||||||||||
| 2/14/2019 | (5) | --- | --- | 3,059 | 83,541 | ||||||||||||||||||||||||||||||
| 1/26/2016(4) | --- | --- | 3,802 | $ 108,091 | 2/19/2020 | (3) | 3,093 | 84,470 | --- | --- | |||||||||||||||||||||||||
| 2/16/2017 (3) | 1,478 | $ 42,020 | --- | --- | |||||||||||||||||||||||||||||||
| 2/16/2017(5) | --- | --- | 3,000 | $ 85,290 | 2/19/2020 | (6) | --- | --- | 3,094 | 84,497 | |||||||||||||||||||||||||
| 2/15/2018 (3) | 3,207 | $ 91,175 | --- | --- | |||||||||||||||||||||||||||||||
| 2/15/2018(6) | --- | --- | 3,208 | $ 91,203 | 9,358 | $ | 255,567 | 9,152 | $ | 249,941 | |||||||||||||||||||||||||
| 7,086 | $ 201,455 | 10,010 | $ 284,584 | ||||||||||||||||||||||||||||||||
Breck W. Tyler | 1/26/2016(3) | 1,921 | $ 54,614 | --- | --- | 2/15/2018 | (3) | 1,924 | $ | 52,544 | --- | --- | |||||||||||||||||||||||
| 1/26/2016(4) | --- | --- | 3,041 | $ 86,456 | |||||||||||||||||||||||||||||||
| 2/16/2017 (3) | 1,182 | $ 33,604 | --- | --- | 2/15/2018 | (4) | --- | --- | 1,800 | $ | 49,158 | ||||||||||||||||||||||||
| 2/16/2017(5) | --- | --- | 2,401 | $ 68,260 | |||||||||||||||||||||||||||||||
| 2/15/2018 (3) | 1,924 | $ 54,699 | --- | --- | 2/14/2019 | (3) | 1,835 | 50,114 | --- | --- | |||||||||||||||||||||||||
| 2/15/2018(6) | --- | --- | 1,925 | $ 54,728 | |||||||||||||||||||||||||||||||
| 5,027 | $ 142,917 | 7,367 | $ 209,444 | 2/14/2019 | (5) | --- | --- | 1,835 | 50,114 | ||||||||||||||||||||||||||
| 2/19/2020 | (3) | 1,856 | 50,687 | --- | --- | ||||||||||||||||||||||||||||||
| 2/19/2020 | (6) | --- | --- | 1,856 | 50,687 | ||||||||||||||||||||||||||||||
| 5,615 | $ | 153,345 | 5,491 | $ | 149,959 | ||||||||||||||||||||||||||||||
| (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 asix-month delay when required by Section 409A. No interest is paid on accumulated dividends. No dividend equivalents are accumulated on the |
| (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, |
| (3) | Reflects time-based restricted stock and restricted units 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 |
| (4) | For awards granted on |
footnote (1) above for information regarding dividend accumulation on the restricted |
| (5) | For awards granted on February |
| (6) | For awards granted on February |
Option Exercises and Stock Vested for 20182020
The following table presents information regarding restricted stock that vested during 20182020 for each of the NEOs. None of the NEOs held or exercised options during 2018.2020.
| Stock Awards | ||||||||||||||||||||||||||
| Number of Shares | Value Realized | |||||||||||||||||||||||||
| Acquired on Vesting(1) | on Vesting(2) | Stock Awards | ||||||||||||||||||||||||
| Name | (#) | ($) | Number of Shares Acquired on Vesting (1) (#) | Value Realized on Vesting (2) ($) | ||||||||||||||||||||||
Gerard R. Host | 22,874 | $732,974 | 15,893 | $ | 508,398 | |||||||||||||||||||||
Duane A. Dewey | 3,668 | $ | 117,335 | |||||||||||||||||||||||
Louis E. Greer | 5,279 | $169,160 | 3,668 | $ | 117,335 | |||||||||||||||||||||
Duane A. Dewey | 5,279 | $169, 160 | ||||||||||||||||||||||||
Wayne A. Stevens | 5,279 | $169,160 | ||||||||||||||||||||||||
Robert B. Harvey | 3,668 | $ | 117,335 | |||||||||||||||||||||||
Breck W. Tyler | 4,223 | $135,322 | 2,935 | $ | 93,887 | |||||||||||||||||||||
| (1) | Represents the total number of restricted shares that vested during |
| (2) | Value realized is the gross number of shares multiplied by the market price of Trustmark’s common stock on the date of vesting. |
The Executive Deferral Plan is discussed in more detail under “Executive Deferral Plan” on page 23.25.
The following table shows the present value at December 31, 2018,2020, 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 15 to Trustmark’s audited financial statements for the year ended December 31, 2018,2020, in Trustmark’s Annual Report on Form10-K filed with the SEC on February 19, 2019.18, 2021.
| Number of Years | Present Value of | Payments During | |||||||||||||||||||||||
| Credited Service(1) | Accumulated Benefit (2)(3) | Last Fiscal Year | |||||||||||||||||||||||
| Name | Plan Name | (#) | ($) | ($) | Plan Name | Number of Years Credited Service (1) (#) | Present Value of Accumulated Benefit (2)(3) ($) | Payments During Last Fiscal Year (4) ($) | |||||||||||||||||
| Gerard R. Host | Executive Deferral Plan | 26 | $ 3,998,740 | --- | Executive Deferral Plan | 28 | $ | 5,297,737 | --- | ||||||||||||||||
Duane A. Dewey | Executive Deferral Plan | 17 | $ | 1,584,830 | --- | ||||||||||||||||||||
| Louis E. Greer | Executive Deferral Plan | 20 | $ 1,277,371 | --- | Executive Deferral Plan | 22 | $ | 1,630,226 | --- | ||||||||||||||||
| Duane A. Dewey | Executive Deferral Plan | 15 | $ 1,122,638 | --- | |||||||||||||||||||||
| Wayne A. Stevens | Executive Deferral Plan | 15 | $ 765,578 | --- | |||||||||||||||||||||
Robert B. Harvey | Executive Deferral Plan | 15 | $ | 1,422,618 | --- | ||||||||||||||||||||
| Breck W. Tyler | Executive Deferral Plan | 18 | $ 982,309 | --- | Executive Deferral Plan | 20 | $ | 1,465,968 | --- | ||||||||||||||||
| (1) |
|
| (2) |
|
| (3) | The present value of accumulated benefit is |
| (4) | Mr. Host became eligible to receive benefit payments under the Executive Deferral Plan on September 1, 2019. The plan provides that payments shall be deferred if such payments would not be deductible under Section 162(m) of the Internal Revenue Code. As a result, all payments due to Mr. Host in 2019 and 2020 were deferred. |
Non-Qualified Deferred Compensation for 20182020
The NQDC Plan is discussed in more detail under“Non-Qualified Deferred Compensation Plan” beginning on page 23.26. The following table presents information relating to each NEO’s participation in the plan:
| Executive | Trustmark | Aggregate | Aggregate | Aggregate Balance | Executive | Trustmark | Aggregate | Aggregate | Aggregate Balance | |||||||||||||||
| Contributions in | Contributions in | Earnings in | Withdrawals/ | at Last Fiscal | Contributions in | Contributions in | Earnings in | Withdrawals/ | at Last Fiscal | |||||||||||||||
| Last Fiscal Year (1) | Last Fiscal Year | Last Fiscal Year (2) | Distributions | Year-End(3) | Last Fiscal Year (1) | Last Fiscal Year | Last Fiscal Year (2) | Distributions | Year-End (3) | |||||||||||||||
| Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||
Gerard R. Host | $ 704,459 | --- | $ (271,930) | --- | $ 5,403,016 | $ 630,229 | --- | $1,119,547 | --- | $ 8,836,000 | ||||||||||||||
Duane A. Dewey | $ 59,886 | --- | $ 41,725 | $ (96,842) | $ 365,894 | |||||||||||||||||||
Louis E. Greer | $ 5,000 | --- | $ (2,124) | --- | $ 105,810 | $ 100,000 | --- | $ 35,409 | --- | $ 263,849 | ||||||||||||||
Duane A. Dewey | --- | --- | $ (9,144) | --- | $ 294,671 | |||||||||||||||||||
Wayne A. Stevens | $ 53,024 | --- | $ (9,326) | --- | $ 151,251 | |||||||||||||||||||
Robert B. Harvey | --- | --- | $ 142,387 | --- | $ 859,314 | |||||||||||||||||||
Breck W. Tyler | --- | --- | $ (112,925) | --- | $ 1,389,223 | --- | --- | $ 312,800 | --- | $ 2,074,393 | ||||||||||||||
| (1) | These amounts are included in the “Summary Compensation Table for |
| (2) | The amounts in this column consist of investment gains for |
| (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 |
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, 2018.2020. The amounts shown are estimates and assume that the termination or change in control event occurred on December 31, 2018.2020. 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, 2018,2020, 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. Host and Mr. Dewey in the table below are determined based on their respective employment agreement and change in control agreement in effect as of December 31, 2020, and references to such agreements in the footnotes below refer to the agreements in effect as of December 31, 2020. Effective January 1, 2021, Mr. Host and Mr. Dewey entered into new employment agreements, and Mr. Dewey’s change in control agreement was terminated. For a description of the prior agreements and the new employment agreements, please see
| Non-CIC | CIC | |||||
| Termination by Company | Termination by Company | |||||
| Without Cause or | Without Cause or | |||||
| by Executive for Good | by Executive for Good | |||||
| Reason under | Reason under | |||||
| Name | Incremental Compensation and Benefit Payments | Agreement | Agreement(1) | |||
| Gerard R. Host(2) | Severance(3) | --- | $ 1,397,284 | |||
| Covenant Payment(3)(4) | $ 2,794,568 | $ 2,794,568 | ||||
| Restricted Stock -- Accelerated Vesting(5) | $ 951,176 | $ 951,176 | ||||
| Executive Deferral Plan(6)(7) | --- | --- | ||||
| Health & Welfare Benefits(8) | $ 44,958 | $ 67,437 | ||||
| Totals | $ 3,790,702 | $ 5,210,465 | ||||
| Louis E. Greer | Severance(3) | --- | $ 1,183,322 | |||
| Covenant Payment | --- | --- | ||||
| Restricted Stock -- Accelerated Vesting(5) | $ 224,140 | $ 224,140 | ||||
| Executive Deferral Plan(6)(7) | --- | $ 55,542 | ||||
| Health & Welfare Benefits(8) | --- | $ 30,479 | ||||
| Totals | $ 224,140 | $ 1,493,483 | ||||
| Duane A. Dewey | Severance(3) | --- | $ 1,044,704 | |||
| Covenant Payment | --- | --- | ||||
| Restricted Stock -- Accelerated Vesting(5) | $ 224,140 | $ 224,140 | ||||
| Executive Deferral Plan(6)(7) | --- | --- | ||||
| Health & Welfare Benefits(8) | --- | $ 39,342 | ||||
| Totals | $ 224,140 | $ 1,308,186 | ||||
| Wayne A. Stevens | Severance(3) | --- | $ 1,075,074 | |||
| Covenant Payment | --- | --- | ||||
| Restricted Stock -- Accelerated Vesting(5) | $ 224,140 | $ 224,140 | ||||
| Executive Deferral Plan(6)(7) | --- | $ 76,555 | ||||
| Health & Welfare Benefits(8) | --- | $ 32,903 | ||||
| Totals | $ 224,140 | $ 1,408,672 | ||||
| Breck W. Tyler | Severance(3) | --- | $ 1,039,634 | |||
| Covenant Payment | --- | --- | ||||
| Restricted Stock -- Accelerated Vesting(5) | $ 167,333 | $ 167,333 | ||||
| Executive Deferral Plan(6)(7) | --- | $ 140,330 | ||||
| Health & Welfare Benefits(8) | --- | $ 39,467 | ||||
| Totals | $ 167,333 | $ 1,386,764 |
“Employment and Change in Control Agreements with NEOs” beginning on page 36.
| 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) | |||
Gerard R. Host (2) | Severance (3) | --- | $ 1,549,782 | |||
| Covenant Payment (3)(4) | $ 3,099,564 | 3,099,564 | ||||
| Restricted Stock -- Accelerated Vesting (5) | 1,306,328 | 1,306,328 | ||||
| Executive Deferral Plan | --- | — | ||||
| Health & Welfare Benefits (8) | 71,306 | 106,959 | ||||
| Totals | $ 4,477,198 | $ 6,062,633 | ||||
Duane A. Dewey | Severance (3) | --- | $ 1,456,446 | |||
| Covenant Payment | --- | — | ||||
| Restricted Stock -- Accelerated Vesting (5) | $ 472,133 | 472,133 | ||||
| Executive Deferral Plan (6) | --- | — | ||||
| Health & Welfare Benefits (8) | --- | 49,883 | ||||
| Totals | $ 472,133 | $ 1,978,462 | ||||
Louis E. Greer | Severance (3) | --- | $ 1,195,650 | |||
| Covenant Payment | --- | — | ||||
| Restricted Stock -- Accelerated Vesting (5) | $ 326,633 | 326,633 | ||||
| Executive Deferral Plan | --- | — | ||||
| Health & Welfare Benefits (8) | --- | 40,167 | ||||
| Totals | $ 326,633 | $ 1,562,450 | ||||
Robert B. Harvey | Severance (3) | --- | $ 1,091,528 | |||
| Covenant Payment | --- | — | ||||
| Restricted Stock -- Accelerated Vesting (5) | $ 326,633 | 326,633 | ||||
| Executive Deferral Plan (6)(7) | --- | 129,323 | ||||
| Health & Welfare Benefits (8) | --- | 26,877 | ||||
| Totals | $ 326,633 | $ 1,574,361 | ||||
Breck W. Tyler | Severance (3) | --- | $ 870,944 | |||
| Covenant Payment | --- | — | ||||
| Restricted Stock -- Accelerated Vesting (5) | $ 196,002 | 196,002 | ||||
| Executive Deferral Plan (6)(7) | --- | 118,862 | ||||
| Health & Welfare Benefits (8) | --- | 55,562 | ||||
| Totals | $ 196,002 | $ 1,241,370 | ||||
| (1) | Mr. Host’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 moreafter-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. Host’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-weightedpro-rata share of his annual bonus target amount for that year ($ |
| (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. Host, Trustmark has the right to retain these amounts if the executive breaches the confidentiality,non-solicitation ornon-competition covenants contained in the executive’s change in control agreement. |
| (4) | Payments pursuant to Mr. Host’s employment agreement in consideration of covenants relating to confidentiality and |
| (5) | Upon a change in control without termination of employment, or upon death or disability, retirement at or after age 65 with consent of the Committee and where cause for termination is not present, 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 apro-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 |
| (6) | Upon death, an incrementalpre-retirement death benefit may be payable to the executive’s beneficiary under the Executive Deferral Plan. |
| (7) | 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, |
| (8) | Mr. Host 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 RegulationS-K, and based on such review and discussions, the Human Resources Committee, as listed below, recommended to the Audit & Finance Committee, acting on behalf of the Board, that the Compensation Discussion and Analysis be included in this proxy statement.
Adolphus B. Baker | Harris V. Morrissette | |
| J. Clay Hays, Jr. M.D. | Richard H. Puckett | |
|
|
Human Resources Committee Interlocks and Insider Participation
The following directors served on Trustmark’s Human Resources Committee during 2018: Adolphus B. Baker (Chairman), Harris V. Morrissette, Richard H. Puckett, and R. Michael Summerford. John M. McCullouch served on the committee before retiring in April 2018. 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 38.43.
For 2018,2020, the ratio of the total compensation of Trustmark’s CEO to the total compensation of Trustmark’s median employee was 60 to the CEO’s total compensation was 1 to 54.1. To calculate this ratio, Trustmark identified its median employee as of December 31, 20172020 based on employees’ gross earnings, lessbefore-tax benefit deductions, as reported in Box 5 of the United States Internal Revenue Service FormW-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 2018 as in 2017, 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 20182020 was determined in accordance with Item 402(c)(2)(x) of RegulationS-K to be $44,508,$60,154, as compared to total compensation of $2,422,580$3,616,342 for Trustmark’s CEO.
Employment and Change inControlin Control Agreements with NEOs
Employment AgreementAgreements with Mr.Host. Host.In connection with his election as President and CEO of Trustmark Corporation and the Bank, Trustmark and Mr. Host entered into an employment agreement, effective January 1, 2011 (the First Host Agreement). This agreement was subsequently amended effective February 15, 2018 (the First Amendment) and amended a second time, effective December 10, 2019 (the Second Amendment). Pursuant to the Second Amendment, Mr. Host ceased serving as President of the Bank, effective January 1, 2020.
The First Host Agreement terminated upon Mr. Host’s retirement as President and CEO of Trustmark and CEO of the Bank on December 31, 2020. On October 27, 2020 Trustmark and Mr. Host entered into a new employment agreement, effective January 1, 20112021 (the Second Host Agreement), to replace his prior 2007 agreement. This agreement was subsequently amended effective February 15, 2018. If not terminated earlier, in connection with Mr. Host’s employment underappointment as Executive Chairman of Trustmark and the Agreement will automatically terminate upon his retirement on December 31, 2019,Bank.
First Host Agreement. Pursuant to the year he turns 65. Either Trustmark orFirst Host Agreement, 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.
Mr. Host iswas guaranteed a minimum base salary of $550,000 annually, subject to annual review. Recognizing the need to be flexible in the current economic environment, the
The First Host Agreement providesprovided that Mr. Host’s base salary may be reduced below $550,000, with his consent, if Trustmark reduces the base salaries of other senior executives.
Mr. Host iswas eligible to earn an annual cash bonus, with a bonus target amount of 90% of his base salary. Mr. Host iswas also eligible to receive equity compensation awards on such basis as the Committee determines and iswas eligible to participate in any benefit plans or programs that are offered to senior executives generally.
On any cessation of employment, Mr. Host will bewas entitled to his earned but unpaid base salary and annual bonus and, except in the case of termination for Cause (as defined in the First Host Agreement), any accrued vacation (earned compensation). Mr. Host will bewas 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 iswas terminated by Trustmark without Cause whether in connection with a change in control of Trustmark or not, or in the event Mr. Host resignsresigned for Good Reason (as defined in the First Host Agreement) whether in connection with a change in control of Trustmark or not.
Under the First Host Agreement, Mr. Host iswas subject to standard confidentiality,non-solicitation andnon-competition obligations during the term of the First Host Agreement and for two years after his employment ends. As partial consideration for these obligations after his employment ends, if Mr. Host’s employment iswas terminated by Trustmark without Cause or if he resignsresigned for Good Reason, he will bewould have been entitled to payments 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), withone-half of the Covenant Payments paid in 12 equal monthly installments commencing 60 days after termination andone-half paid in a lump sum 60 days after termination.
If Mr. Host’s employment iswas terminated by Trustmark without Cause or he resignsresigned for Good Reason, in each case within two years after a change in control, he will bewould have been entitled to the following benefits in addition to the Covenant Payments and earned compensation: (i) a lump sum payment equal to one times his base salary and the average of his annual bonuses earned for the three years prior to the change in control,(ii) thirty-six months of continuing medical, dental, vision and group life coverage on the same premium cost sharing basis as prior to termination, and (iii) accelerated vesting of any unvested stock options.
If Mr. Host’s employment iswas terminated by Trustmark without Cause or he resignsresigned for Good Reason where he is not entitled to such change in control enhanced severance benefits, he will bewould have been 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’s employment was terminated due to disability or if he died during the term, he or his designated beneficiary, spouse or estate would have been entitled to a lump sum payment of his earned compensation plus a time-weighted pro-rata share of his annual bonus target amount for that year.
The amounts which would have been payable to Mr. Host assuming a termination event on December 31, 2020, are addressed in the “Potential Payments Upon Termination or Change in Control” table beginning on page 35.
The above is a summary of the material terms and provisions of the First Host Agreement. For the complete First Host Agreement, including the definitions of the defined terms used therein, refer to the copies of the First Host Agreement that has been filed with the SEC on September 14, 2010, as Exhibit 10-z to Trustmark’s Current Report on Form 8-K, the First Amendment to the First Host Agreement that has been filed with the SEC on February 20, 2018, as Exhibit 10-v to Trustmark’s Annual Report on Form 10-K and the Second Amendment to the First Host Agreement that has been filed with the SEC on December 10, 2019, as Exhibit 10.1 to Trustmark’s Current Report on Form 8-K, and are incorporated by reference into this proxy statement.
Second Host Agreement.In connection with Mr. Host’s election and appointment as Executive Chairman of Trustmark and the Bank, effective January 1, 2021, Trustmark and Mr. Host entered into the Second Host Agreement.
The Second Host Agreement provides for Mr. Host to serve as Executive Chairman of Trustmark and the Bank for a term beginning January 1, 2021 and continuing until the 2022 Annual Meeting of Shareholders.
Under the Second Host Agreement, Mr. Host is guaranteed a minimum annual base salary of $700,000. Mr. Host’s base salary may be reduced, however, below $700,000, if Trustmark reduces the base salaries of other senior executives. Mr. Host will be eligible to earn an annual cash bonus, with a bonus target amount of 60% of his base salary. The Human Resources Committee will have the discretion to increase the annual bonus above or decrease the annual bonus below the bonus target amount for that year. Mr. Host will also be eligible to receive equity compensation awards on such basis as the Human Resources Committee of Trustmark’s Board of Directors determines.
On any cessation of employment, Mr. Host will be entitled to his unpaid earned base salary and, except in the case of termination for Cause (as defined below), any unpaid earned annual bonus for the prior year (earned compensation). He will be 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 in connection with a change in control of Trustmark or not, or in the event Mr. Host resigns for Good Reason (as defined below) in connection with a change in control (as defined below) of Trustmark or not.
If Mr. Host’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, he will be entitled to earned compensation and a payment equal to two times the sum of (1) his annual base salary and (2) the average of his annual
bonuses for the three years prior to the end of his employment. He will also be entitled to 24 months of continuing medical, dental and vision coverage (or a cash payment in lieu thereof) on the same premium cost sharing basis as prior to termination.
If Mr. Host’s employment is terminated by Trustmark other 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 Second Host Agreement, he will be entitled to the following additional severance benefits (in addition to earned compensation): (1) a payment equal to three times the sum of (x) his annual base salary immediately prior to the change in control and (y) the average of his annual bonuses for the three years prior to the change in control, (2) 36 months of continuing medical, dental and vision coverage (or a cash payment in lieu thereof) on the same premium cost sharing basis as prior to termination, and (3) accelerated vesting of any unvested 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 due to disability or if he dies during the term, he or his designated beneficiary, spouse or estate will be entitled to a lump sum payment of his earned compensation plus a lump-sum payment of the time-weightedpro-rata share of his annual bonus target amount for that year.
Employment Agreement with Mr. Dewey.In certain cases, someconnection with Mr. Dewey’s election and appointment as President and designation as CEO of Trustmark and the Bank, effective January 1, 2021, Trustmark and Mr. Dewey entered into an employment agreement (the Dewey Agreement) to replace Mr. Dewey’s change in control agreement. The Dewey Agreement is effective as of January 1, 2021. The Dewey Agreement provides for Mr. Dewey to serve as President and CEO of Trustmark and the Bank for a term of five years beginning January 1, 2021.
Under the Dewey Agreement, Mr. Dewey will be guaranteed a minimum annual base salary of $700,000, subject to annual review. Mr. Dewey’s base salary may be reduced, however, below $700,000, if Trustmark reduces the base salaries of other senior executives. Mr. Dewey will be eligible to earn an annual cash bonus, with a bonus target amount of 75% of his base salary, or allfor 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 will have the payments and benefits provideddiscretion to increase the annual bonus above or decrease the annual bonus below the bonus target amount for that year. Mr. Dewey will also be eligible to receive equity compensation awards on terminationsuch basis as the Human Resources Committee of Trustmark’s Board of Directors determines.
The Dewey Agreement provides that on any cessation of employment, mayMr. Dewey will be delayedentitled to his unpaid earned base salary and, except in the case of termination for six months following terminationCause (as defined below), any unpaid earned annual bonus for the prior year (earned compensation). He will be entitled to complyadditional 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 in connection with a change in control of Trustmark or not, or in the requirementsevent Mr. Dewey resigns for Good Reason (as defined below) in connection with a change in control (as defined below) of Section 409ATrustmark 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, he will be entitled to earned compensation and a payment equal to two times the Internal Revenue Code. Any payment requiredsum of (i) his annual base salary and (ii) the average of his annual bonuses for the three years prior to be delayed would be paid at the end of thesix-month periodhis employment. He will also be entitled to 24 months of continuing medical, dental and vision coverage (or a cash payment in lieu thereof) on the same premium cost sharing basis as prior to termination.
If Mr. Dewey’s employment is terminated by Trustmark other than for Cause, death or disability or he resigns for Good Reason, in each case within two years after a lumpchange in control during the term of the Dewey Agreement, he will be entitled to the following additional severance benefits (in addition to earned compensation): (i) a payment equal to three times the sum of (x) his annual base salary immediately prior to the change in control and (y) the average of his annual bonuses for the three years prior to the change in control, (ii) 36 months of continuing medical, dental and vision 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 equity incentive awards, with any payments due after thesix-month period being paid at the normal payment date provided for under the Agreement. In the casetime- or service-based vesting conditions deemed to be satisfied and any performance-based vesting conditions to be based on performance as of benefits that are delayed, Mr. Host would pay the cost of benefit coverage during thesix-month delay period and then be reimbursed by the company at the end of the calendar quarter ending on or prior to the change in control.
If Mr. Dewey’s employment is terminated due to disability or if he dies during the term, he or his designated beneficiary, spouse or estate will be entitled to his earned compensation plus a six-monthlump-sum period.payment of the time-weighted pro-rata share of his annual bonus target amount for that year.
TheCertain Defined Terms Used in Second Host 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.
Dewey Agreement.For purposes of this agreement, “Cause”the Second Host Agreement and 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 finalcease-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 thanone-third change in the Board (Existing Board), treating any persons approved by a vote of at leasttwo-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, 2018,foregoing descriptions are addressed in the “Potential Payments Upon Termination or Change in Control” table beginning on page 32.
The above is a summarysummaries of the material terms and provisions of the Second Host Agreement and the Dewey Agreement. For the complete Second Host Agreement and Dewey Agreement, including the exact definitions of the defined terms used therein, refer to the copies of the Second Host Agreement and Dewey Agreement that hashave been filed with the SEC on September 14, 2010October 27, 2021, as Exhibit10-zExhibits 10.1 and 10.2 to Trustmark’s Current Report on Form8-K and the Amendment to the Agreement that has been filed with the SEC on February 20, 2018 as Exhibit10-v to Trustmark’s Annual Report on Form10-K, and are 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 a CIC Agreement), other than Mr. Host whose employment agreement already provided change in control benefits. In addition, Mr. Dewey’s CIC Agreement 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 standardnon-solicitation andnon-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 ornon-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, “Cause” and “change in control” have substantially the same meanings as in Mr. Host’s employment agreement,the First Host 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 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. Host under the CIC Agreements assuming a change in control and termination event on December 31, 2018,2020, are addressed in the “Potential Payments Upon Termination or Change in Control” table beginning on page 32.35.
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 Exhibit10-ad to Trustmark’s Form8-K Current Report, and is incorporated by reference into this proxy statement.
Non-employee director compensation is determined by the Board, based on the recommendation of the Human Resources Committee. Directors who are employed by Trustmark receive no compensation for Board or committee service. During 2018,2020, eachnon-employee director who served on the Board also served on the Bank Board.
The Board periodically reviewsnon-employee director compensation to determine if changes are needed, including by comparing it tonon-employee director compensation at peer companies.
For 2018,2020, cash compensation fornon-employee directors was comprised of an annual retainer of $40,000$45,000 for their combined service on the Trustmark Board and the Bank Board. In addition, the independent Chairman of the Board received an annual retainer of $50,000, the$50,000. The Lead Director received an annual cash retainer of $30,000. The Chairs of certain Trustmark Board committees received an annual retainer ($20,000 for the Chair of the Audit & Finance Committee, $15,000 for the Chairs of the Human Resources Committee and the Enterprise Risk Committee, and $5,000 for the Chair of 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). All members of Board and Bank Board committees, other than the Chairs,Chairmen, also received an annual retainer of $2,500 per committee. In addition, Mrs. Conerly served on the FloridaEmerald Coast Community Bank Advisory Board of Directors and received a fee of $1,000 for each meeting attended. Mr. Morrissette served on the Mobile/Baldwin County, Alabama Community Bank Advisory Board of Directors and received a fee of $750 for each meeting attended.
Annual retainer fees were paid monthly. Directors are also eligible to be reimbursed for expenses incurred in attending Board and committee meetings.
For 2018,2020, each director also received an award of time-based restricted stock under the Amended and Restated Stock Plan valued at approximately $50,000. All$55,000. To help align the interests of directors are requiredwith shareholders and encourage a focus on long-term growth, Trustmark has guidelines that require non-executive directors to own at least 8,000a minimum number of shares of Trustmark stock. Allstock 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 calculated by reference to 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 2020, all of the current directors, other thanexcept General Collins, Mr. Eduardo and Dr. Hays, who joined the Board in 2017, meet the minimum stock ownership requirement. New directors have up to five years from the date Board service begins to meet the stock ownership requirement.requirements. Until a director has reached the minimum requirement, the director is required to hold 100% of the shares received from any Trustmark stock awards. 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. Directors are also prohibited from pledging or creating a security interest in any Trustmark stock they hold.
Trustmark maintains a Directors’ Deferred Fee Plan fornon-employee directors who became directors prior to 2003 and who elected to participate in the plan. Under the 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 twenty-five years and, as of December 31, 2018,2020, ranges from $51,000 to $78,000 (taking into account the March 1, 2010, benefit accrual freeze) for current directors who elected to participate in the plan. Trustmark has purchased life insurance contracts on participating directors to fund the benefits under this plan.
Non-employee directors may defer all or a part of their annual retainer fees pursuant to the NQDC Plan. The compensation deferred is credited to an account, which is deemed invested in and mirrors the performance of one or more designated investment funds available under the plan and selected at the option of the director. The deferred compensation account will be paid in a lump sum or in annual installments at a designated time upon the occurrence of an unforeseen emergency or upon a director’s retirement or cessation of service on the Board.
Director Compensation for 20182020
The following table provides director compensation information for the year ended December 31, 2018.2020.
| Name(1) | Fees Earned ($) | Stock Awards (3) ($) | Option ($) | Non-Equity Incentive Plan Compensation ($) | Change in Compensation Earnings(5) ($) | All Other ($) | Total ($) | Fees Earned ($) | Stock Awards (3) ($) | Option Awards (4) ($) | Non-Equity Incentive Plan Compensation ($) | Change in ($) | All Other Compensation (6) ($) | Total ($) | |||||||||||||||||||||||||||||||||||||
Adolphus B. Baker | $59,167 | $51,184 | --- | --- | --- | $4,746 | $ | 115,097 | $ | 65,000 | $ | 54,447 | --- | --- | $ | 136,778 | $ | 4,449 | $ | 260,674 | |||||||||||||||||||||||||||||||
William A. Brown | $45,000 | $51,184 | --- | --- | --- | $3,715 | $ | 99,899 | $ | 50,000 | $ | 54,447 | --- | --- | --- | $ | 4,449 | $ | 108,896 | ||||||||||||||||||||||||||||||||
James N. Compton | $47,500 | $51,184 | --- | --- | --- | $3,715 | $ | 102,399 | |||||||||||||||||||||||||||||||||||||||||||
Augustus L. Collins (7) | $ | 33,333 | $ | 59,065 | --- | --- | --- | $ | 1,566 | $ | 93,964 | ||||||||||||||||||||||||||||||||||||||||
James N. Compton (8) | $ | 17,500 | $ | 54,447 | --- | --- | --- | $ | 1,112 | $ | 73,059 | ||||||||||||||||||||||||||||||||||||||||
Tracy T. Conerly | $68,000 | $51,184 | --- | --- | --- | $4,746 | $ | 123,930 | $ | 72,667 | $ | 54,447 | --- | --- | --- | $ | 4,449 | $ | 131,563 | ||||||||||||||||||||||||||||||||
Toni D. Cooley | $60,000 | $51,184 | --- | --- | --- | $4,746 | $ | 115,930 | $ | 65,000 | $ | 54,447 | --- | --- | --- | $ | 4,449 | $ | 123,896 | ||||||||||||||||||||||||||||||||
Marcelo Eduardo (7) | $ | 33,333 | $ | 59,065 | --- | --- | --- | $ | 1,566 | $ | 93,964 | ||||||||||||||||||||||||||||||||||||||||
J. Clay Hays Jr., M.D. | $45,000 | $51,184 | --- | --- | --- | $3,715 | $ | 99,899 | $ | 51,667 | $ | 54,447 | --- | --- | --- | $ | 4,449 | $ | 110,563 | ||||||||||||||||||||||||||||||||
John M. McCullouch(7) | $20,000 | $51,184 | --- | --- | --- | $1,187 | $ | 72,371 | |||||||||||||||||||||||||||||||||||||||||||
Harris V. Morrissette | $48,250 | $51,184 | --- | --- | --- | $3,715 | $ | 103,149 | $ | 53,250 | $ | 54,447 | --- | --- | --- | $ | 4,449 | $ | 112,146 | ||||||||||||||||||||||||||||||||
Richard H. Puckett | $57,500 | $51,184 | --- | --- | --- | $4,746 | $ | 113,430 | $ | 82,500 | $ | 54,447 | --- | --- | $ | 107,139 | $ | 4,449 | $ | 248,535 | |||||||||||||||||||||||||||||||
R. Michael Summerford | $98,333 | $51,184 | --- | --- | --- | $4,746 | $ | 154,263 | |||||||||||||||||||||||||||||||||||||||||||
R. Michael Summerford (8) | $ | 34,167 | $ | 54,447 | --- | --- | --- | $ | 1,112 | $ | 89,726 | ||||||||||||||||||||||||||||||||||||||||
Harry M. Walker | $50,000 | $51,184 | --- | --- | --- | $3,715 | $ | 104,899 | $ | 60,000 | $ | 54,447 | --- | --- | --- | $ | 4,449 | $ | 118,896 | ||||||||||||||||||||||||||||||||
LeRoy G. Walker, Jr. | $47,500 | $51,184 | --- | --- | --- | $4,746 | $ | 103,430 | |||||||||||||||||||||||||||||||||||||||||||
LeRoy G. Walker, Jr. (8) | $ | 17,500 | $ | 54,447 | --- | --- | $ | 49,677 | $ | 1,112 | $ | 122,736 | |||||||||||||||||||||||||||||||||||||||
William G. Yates III | $45,000 | $51,184 | --- | --- | --- | $4,746 | $ | 100,930 | $ | 50,000 | $ | 54,447 | --- | --- | --- | $ | 4,449 | $ | 108,896 | ||||||||||||||||||||||||||||||||
| (1) |
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| (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, the amount also includes fees paid for attendance at meetings of the |
| (3) | On February |
| (4) | No stock option awards were made during |
| (5) |
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| (6) | The amounts in this column reflect the dividends credited to shares of unvested time-based restricted stock held by the directors on each dividend payment date during |
| (7) | General Collins and Mr. |
| (8) | Messrs. Compton, Summerford and L. Walker retired from the Board on April |
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 NEOs 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
“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 toTrustmark’s named executive officers, as disclosed pursuant to Item 402 of RegulationS-K, including the Compensation Discussion and Analysis, the compensation tables and the narrative discussion disclosed in this proxy statement on pages 1417 to 33.28.”
Trustmark believes that its executive compensation and compensation practices and policies are reasonable in comparison to its peer group, are focused onpay-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” 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.
The Board recommends that shareholders vote “for” this proposal to provide advisory approval of Trustmark’s executive compensation.
PROPOSAL 3: RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
Trustmark has engaged Crowe as its independent auditor since December 21, 2015, and the Audit & Finance Committee reaffirmed Crowe’s engagement as the independent auditor for the fiscal year ending December 31, 2019.2021. The Board recommends that shareholders vote in favor of ratifying the selection of Crowe. If shareholders do not ratify the selection of Crowe, the Audit & Finance Committee will consider a change in independent auditor for the next year.
The Audit & Finance Committee is responsible for approving the compensation paid to Crowe as Trustmark’s independent auditor. In order to assure continuing auditor independence, the Audit & Finance Committee periodically considers whether there should be regular rotation of the independent auditing firm. The members of the Audit & Finance Committee and the Board believe that continued retention of Crowe to serve as Trustmark’s independent auditor is in the best interest of Trustmark and its shareholders.
Representatives of Crowe are expected to be present at the annual 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” ratification of the selection of Crowe as Trustmark’s independent auditor.
AUDIT & FINANCE COMMITTEE REPORT
Trustmark’s Audit & Finance Committee conducts the usual and necessary activities in connection with the audit functions of Trustmark. The Committee reviewed and discussed with management and Crowe the consolidated audited financial statements as of and for the three years ended December 31, 2018.2020. The Committee also discussed with Crowe the matters required to be discussed under the auditing standardsapplicable requirements of the Public Company Accounting Oversight Board (PCAOB), including Auditing Standard No. 1301.. The Committee received the written disclosures and the letter from Crowe 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 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 Form10-K for the year ended December 31, 2018.2020.
All of the following members of Trustmark’s Audit & Finance Committee are independent directors as defined by NASDAQNasdaq Listing Rules:
Tracy T. Conerly (Chair) |
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William A. Brown |
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The Board has determined that Tracy T. Conerly and James N. ComptonHarris V. Morrissette each qualify as an audit committee financial expert pursuant to the requirements of the SEC.
The following table presents the fees for professional audit services rendered by Crowe for the audit of Trustmark’s consolidated financial statements for the fiscal years ended December 31, 2018,2020, and December 31, 2017,2019, and fees billed for other services rendered by Crowe during those periods. All services reflected below for 20182020 and 2017
2019 werepre-approved in accordance with the policy of the Audit & Finance Committee. Information related to audit fees for 20182020 includes amounts billed through December 31, 2018,2020, and additional amounts estimated to be billed for the 20182020 period for audit services rendered.
| Year | Audit Fees(1) | Audit-Related Fees(2) | All Other Fees(3) | Total | ||||
2018 | $ 921,000 | $ 240,836 | --- | $ 1,161,836 | ||||
2017 | $ 905,000 | $ 213,405 | --- | $ 1,118,405 |
| Year | Audit Fees (1) | Audit-Related Fees (2) | All Other Fees (3) | Total | ||||
2020 | $1,163,900 | $375,839 | --- | $ 1,539,739 | ||||
2019 | $1,114,000 | $226,271 | -- | $ 1,340,271 |
| (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) |
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| (3) | Crowe did not provide any tax services to Trustmark in |
The Audit & Finance Committee has adopted a policy that sets forth guidelines and procedures for thepre-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 specificpre-approval by the Committee. The Committee has delegated to its ChairmanChair the authority to evaluate and approve services and fees in the event thatpre-approval is required between meetings. If the ChairmanChair grants such approval, she 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’spre-approval policy.
This section provides information regarding certain transactions between Trustmark and its subsidiaries and certain of our directors and officers.
The Bank has made loans to directors, executive officers and principal shareholders and their related interests in 20182020 and in prior years and continues to do so in 2019.2021. 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 20182020 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 20192021 to Bloomfield Equities, LLC, for naming rights to Trustmark Park. The specific dollar value of Mr. Yates III’s interest in the 20192021 transaction is not known at this time.
In addition, Trustmark purchased a $16,500 sponsorship frompaid $5,000 in 2020 to Spectrum Events, LLC for the sponsorship of a high school baseball tournament played at Trustmark Park. (Due to the COVID-19 pandemic, the 2020 Governor’s Cup college baseball games scheduled to be played at Trustmark Park, in 2018.for which Trustmark had purchased a sponsorship, were cancelled.) Spectrum Events, LLC is wholly owned by Spectrum Capital, LLC. The dollar value of Mr. Yates III’s interest in these transactions isthe transaction was approximately $5,445. The$1,650, and the collective dollar value of these transactionsthis transaction to the Yates family (excluding Mr. Yates) iswas approximately $11,055.$3,350. Trustmark expects to pay $17,000$14,000 for sponsorship to Spectrum Events, LLC, forof high school and college baseball games playedseries to be held at Trustmark Park in 2019.2021. The specific dollar value of Mr. Yates III’s interest in the 2021 transactions is not known at this time.
In addition, during 2018 Trustmark paid Bloomfield Holdings, LLC $120,000$60,000 in 2020 for, among other things, exclusive banking rights at the Outlets of Mississippi, which is owned by Bloomfield Holdings, LLC; of this amount, $60,000 is attributable to 2018 and $60,000 is attributable to 2019.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 $35,640.$17,820. The collective dollar value of these transactions to the Yates family (excluding Mr. Yates) was approximately $72,360.$36,180. Trustmark anticipates paying Bloomfield Holdings, LLC $60,000 in 2021 for, among other things, exclusive banking rights at the Outlets of Mississippi.
During 2013, in connection with the New Markets Tax Credit Program, the Bank purchased approximately $4,350,000$4.4 million of state and federal tax credits for $2,757,000approximately $2.8 million through two entities in each of which the Bank holds a 99.99% interest. The federal tax credit, which totaled approximately $1,950,000,$2.0 million, was allocated to this transaction by SCCSub-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 $2,757,000approximately $2.8 million investment, $2,047,040approximately $2.0 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 interestThese tax-credit transactions were unwound and the loan’s outstanding balance was repaid in the Bank’s investment was approximately $684,659. The collective dollar value to the Yates family of the Bank’s investment is approximately $2,053,977.2020.
During 2017,2020, the Bank entered into apaid approximately $3.4 million in construction management agreement withfees to W. G. Yates & Sons Construction Company (WGY&S) in connection with the construction of a new branch office facility to befacilities located in Jackson and Brandon, Mississippi. WGY&S is wholly-owned by Mr. Yates III and his family, and Mr. Yates III serves as its President and CEO. During 2018, the Bank paid $488,566Trustmark expects to pay approximately $1.0 million in construction management fees to WGY&S relating to the Brandon, Mississippi, project in connection with the ongoing construction.2021.
In addition, during 2018,2020, Trustmark paid $92,148approximately $65,000 to WGY&S for assistance with hurricane disaster response, recovery and repairs for branch offices located in Panama City and Lynn Haven,Bay County, Florida, following Hurricane Michael. It is anticipated that WGY&S will continue to provide services for these branch officesMichael in 2019.October 2018.
During 2018,2020, 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 $1,395,660$1.3 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 2019.2021. The dollar value of Mr. Yates III’s interest in this transaction is not known at this time. In addition, during 20182020, WGY&S and certain of its subsidiaries and affiliates paid the Bank an aggregate of $253,598approximately $290,000 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 continues to provide these services for WGY&S in 2019.2021. The dollar value of Mr. Yates III’s interest in this transaction is not known at this time.
During 2020, MINACT, Inc. 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 $281,000 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 2021.
Trustmark’s Audit & Finance Committee has adopted and manages a written policy that governs the review, approval or ratification of related party transactions. For purposes of this policy, a “related party transaction” is a transaction, arrangement or relationship (or a series of similar transactions, arrangements or relationships) in which Trustmark is, or will be, a participant and in which a “related party” has a direct or indirect material interest where the aggregate amount involved exceeds $120,000. A “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) an entity (a) which is controlled by someone listed in (i), (ii) or (iii), (b) in which someone listed in (i), (ii) or (iii) above owns 5% or more of the outstanding equity securities, or (c) of which someone listed in (i), (ii) or (iii) is an executive officer or general partner.
The policy provides that any related party transaction must be reported to the General Counsel and may be consummated or may continue only if the Audit & Finance Committee determines that, under all of the circumstances, 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 bepre-approved by the Audit & Finance 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 the Trustmark and not presenting more than the normal risk of collectability or other unfavorable features.
The Audit & Finance Committee considered and approved, or ratified, the payments, as applicable, to Bloomfield Equities, LLC, Spectrum Events, LLC, Bloomfield Holdings, LLC, and WGY&S, and, therefore, to Mr. Yates III, as well as the business relationships between Fisher Brown Bottrell, the Bank and WGY&S and certain of its subsidiaries and affiliates.affiliates, and the business relationship between Fisher Brown Bottrell and MINACT, Inc.
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 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 65,615,54163,694,153 shares of Trustmark common stock outstanding as of February 1, 2019,2, 2021, which includes unvested restricted stock. For certain of the directors, the number of shares beneficially owned includes shares underlying restricted stock units that vest within 60 days of February 2, 2021. As of February 1, 2019,2, 2021, there were no options outstanding.
| Name | Shares Beneficially Owned as of 02/01/19 | Percent of Outstanding Shares | ||||||||
BlackRock, Inc. | 9,652,497 | (1) | 14.7% | |||||||
BlackRock, Inc. 55 East 52nd Street | ||||||||||
New York, New York 10055 | ||||||||||
The Vanguard Group | 6,069,644 | (2) | 9.2% | |||||||
100 Vanguard Boulevard | ||||||||||
Malvern, Pennsylvania 19355 | ||||||||||
The Robert M. Hearin Foundation | 5,558,024 | (3) | 8.5% | |||||||
The Robert M. Hearin Support Foundation | ||||||||||
Post Office Box 16505 | ||||||||||
Jackson, Mississippi 39236 | ||||||||||
Dimensional Fund Advisors LP | 5,475,878 | (4) | 8.3% | |||||||
Dimensional Place 6300 Bee Cave Road, Building One | ||||||||||
Austin, Texas 78746 | ||||||||||
Adolphus B. Baker | 31,213 | (5) | ||||||||
William A. Brown | 10,496 | (5) (6) | ||||||||
James N. Compton | 30,680 | (5) (7) | ||||||||
Tracy T. Conerly | 8,891 | (5) | ||||||||
Toni D. Cooley | 13,537 | (5) | ||||||||
Duane A. Dewey | 47,340 | (8) (9) | ||||||||
Louis E. Greer | 51,073 | (9) (10) | ||||||||
J. Clay Hays, Jr., M.D. | 6,401 | (5) (11) | ||||||||
Gerard R. Host | 271,559 | (12) | ||||||||
Harris V. Morrissette | 13,119 | (5) | ||||||||
Richard H. Puckett | 99,615 | (5) (13) | ||||||||
Wayne A. Stevens | 45,034 | (9) (14) | ||||||||
R. Michael Summerford | 17,803 | (5) | ||||||||
Breck W. Tyler | 49,724 | (15) | ||||||||
Harry M. Walker | 63,441 | (5) (16) | ||||||||
LeRoy G. Walker, Jr. | 13,159 | (5) | ||||||||
William G. Yates III | 16,960 | (5) | ||||||||
Directors and executive officers of Trustmark as a group | 971,279 | (17) | 1.5% | |||||||
| Name | Shares as of 02/02/21 | Percent of Outstanding Shares | ||||||||
BlackRock, Inc. | 7,147,909 | (1) | 11.2 | % | ||||||
The Robert M. Hearin Foundation | 5,558,024 | (2) | 8.7 | % | ||||||
The Vanguard Group | 5,554,831 | (3) | 8.7 | % | ||||||
Dimensional Fund Advisors LP | 4,022,520 | (4) | 6.3 | % | ||||||
Adolphus B. Baker | 38,134 | (5) | ||||||||
William A. Brown | 13,964 | (5) (6) | ||||||||
Augustus L. Collins | 1,453 | |||||||||
Tracy T. Conerly | 12,402 | (5) | ||||||||
Toni D. Cooley | 16,769 | (5) | ||||||||
Duane A. Dewey | 52,649 | (7) | ||||||||
Marcelo Eduardo | 1,418 | (8) | ||||||||
Louis E. Greer | 52,984 | (9) (10) | ||||||||
Robert B. Harvey | 35,559 | (9) | ||||||||
J. Clay Hays, Jr., M.D. | 9,671 | (5) (11) | ||||||||
Gerard R. Host | 279,481 | (12) | ||||||||
Harris V. Morrissette | 18,206 | (5) | ||||||||
Richard H. Puckett | 110,974 | (5) (13) | ||||||||
Breck W. Tyler | 28,241 | (14) | ||||||||
Harry M. Walker | 61,161 | (5) (15) | ||||||||
William G. Yates III | 20,231 | (5) | ||||||||
Directors and executive officers of Trustmark as a group | 858,545 | (16) | 1.3 | % | ||||||
| (1) | According to Amendment No. |
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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, Galaxie Corporation, Bay Street, LLC, Harbor Street, Inc. andH-H Corporation, (collectively, Hearin Foundation), as of December 31, |
According to Amendment No. |
| (4) | According to Amendment No. 4 to Schedule 13G filed with the SEC on February 16, 2021, by Dimensional Fund Advisors LP, as of December 31, 2020, Dimensional Fund Advisors LP, through its subsidiaries, has sole voting power with respect to 3,888,660 shares of Trustmark common stock and sole investment power with respect to 4,022,520 shares of Trustmark common stock. The aggregate amount beneficially owned by each reporting person was 4,022,520 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) | Includes |
| (6) | Includes 500 shares held in trust of which Mr. Brown is theco-trustee and sole beneficiary. |
| (7) | Includes |
|
| (8) | Includes 1,316 shares owned by his spouse as to which Mr. Eduardo has no voting or investment control. |
| (9) | Includes |
| (10) | Includes |
| (11) | Includes 200 shares as to which Dr. Hays shares voting and investment power with his spouse. |
| (12) | Includes |
| (13) | Includes 75,138 shares owned by his spouse as to which Mr. Puckett has no voting or investment control. |
| (14) | Includes |
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| (15) | Includes 56,044 shares as to which Mr. |
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Includes shares held directly or indirectly by |
DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS
Section 16(a) of 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. Trustmark believes that applicable Section 16(a) filing requirements were met during 2018,2020, except that, Mr. Puckett inadvertently faileddue to file seven Form 4s reporting seven transactions that occurred in 2018 related to sales of shares held in two trusts for an immediate family member, for which he serves as trustee. Mr. Puckett reported these sales oninadvertent error, a Form 54 was filed in February 2019.late for Maria L. Sugay relating to the acquisition of 1,500 shares of common stock on July 28, 2020.
Shareholders may submit proposals to be considered at the 20202022 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 6,9, any shareholder intending to nominate a candidate for election to the Board at Trustmark’s 20202022 Annual Meeting of Shareholders must submit notice to the Secretary no earlier than December 11, 2019,15, 2021, and no later than January 10, 2020.14, 2022. Any shareholder intending to propose a matter for consideration at Trustmark’s 20202022 Annual Meeting of Shareholders (other than a director nomination) must submit such proposal in writing to the Secretary at Trustmark Corporation, Post Office Box 291, Jackson, MS 39205 no later than January 27, 2020;29, 2022; however, in order to be considered for inclusion in Trustmark’s proxy statement for the 20202022 Annual Meeting of Shareholders, the proposal must meet the requirements of SEC Rule14a-8 and be submitted to the Secretary no later than November 12, 2019.15, 2021. In addition, the proxy solicited by the Board for the 20202022 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 27, 2020.29, 2022.
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 23, 2019:27, 2021:
This proxy statement, a form of the proxy card and Trustmark’s 2018 Annual Report to Shareholders2020 Year in Review are available at www.trustmark.com underinvestorrelations.trustmark.comAbout Us/Investor Relations/Annual Meeting of Shareholders.. 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 2018 Annual Report to Shareholders.2020 Year in Review. Shareholders who do not receive a Notice of Internet Availability will receive a printed copy of the proxy materials by mail.
P.O. BOX 291 JACKSON, MS 39205-0291 | VOTE BY INTERNET Before The Meeting -Go towww.proxyvote.com | |||||
Shareholders may use the Internet to transmit their voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on April | ||||||
During The Meeting - Go to www.virtualshareholdermeeting.com/TRMK2021 | ||||||
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS If you would like to reduce the 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 | ||||||
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. |
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V.1.1
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement, 2018 Annual Report to Shareholders and 2018 Form 10-K
are available at www.proxyvote.com.
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| DETACH AND RETURN THIS PORTION ONLY | ||||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
TRUSTMARK CORPORATION
Items of Business The Board of Directors recommends a vote FOR all nominees listed in Proposal 1 and FOR Proposals 2 and 3. | ||||||||||||||
| 1. | Election of Directors - To elect a board of twelve directors to hold office for the ensuing year or until their successors are elected and qualified. | |||||||||||||
| Nominees: | For | Against | Abstain | |||||||||||
| 1a. | Adolphus B. Baker | ☐ | ☐ | ☐ | ||||||||||
| 1b. | William A. Brown | ☐ | ☐ | ☐ | ||||||||||
| 1c. | Augustus L. Collins | ☐ | ☐ | ☐ | ||||||||||
| 1d. | Tracy T. Conerly | ☐ | ☐ | ☐ | ||||||||||
| 1e. | Toni D. Cooley | ☐ | ☐ | ☐ | ||||||||||
| 1f. | Duane A. Dewey | ☐ | ☐ | ☐ | ||||||||||
| 1g. | Marcelo Eduardo | ☐ | ☐ | ☐ | ||||||||||
| 1h. | J. Clay Hays, Jr., M.D. | ☐ | ☐ | ☐ | ||||||||||
| 1i. | Gerard R. Host | ☐ | ☐ | ☐ | ||||||||||
| ||||||||||||||||
| For | Against | Abstain | ||||||||||||||
| 1j. Harris V. Morrissette | ☐ | ☐ | ☐ | |||||||||||||
| 1k. Richard H. Puckett | ☐ | ☐ | ☐ | |||||||||||||
| 1l. William G. Yates III | ☐ | ☐ | ☐ | |||||||||||||
| 2. |
| ☐ | ☐ | ☐ | ||||||||||||
| 3. | To ratify the selection of Crowe LLP as Trustmark’s independent auditor for the fiscal year ending December 31, 2021. | ☐ | ☐ | ☐ | ||||||||||||
| 4. | To transact such other business as may properly come before the meeting. | |||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] Date | Signature (Joint Owners) Date | |||||||||||||
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement, 2020 Year in Review and 2020 Form 10-K
are available at www.proxyvote.com.
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TRUSTMARK CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 2021
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 virtually at www.virtualshareholdermeeting.com/TRMK2021 on Tuesday, April 27, 2021, at 1:00 p.m. Central Time. The 16-digit control number included on this proxy card will be required to access the meeting.
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 AND “FOR” RATIFICATION OF THE SELECTION OF CROWE LLP AS INDEPENDENT AUDITOR FOR THE FISCAL YEAR ENDING DECEMBER 31, 2021.
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
