2019 Annual Meeting Notice & Proxy Statement | Trustmark Corporation

Notice of Annual Meeting of Shareholders

The 2019 Annual Meeting of Shareholders of Trustmark Corporation (Trustmark) will be held as follows:

DATE AND TIME Tuesday, April 23, 2019, at 1:00 p.m.   LOCATION Trustmark Corporate Office 248 East Capitol Street Jackson, Mississippi 39201   ITEMS OF BUSINESS 1)  To elect a board of 13 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, 2019.

RECORD DATE

Shareholders of record on March 1, 2019, are eligible to vote at the meeting in person or by proxy.

PROXY VOTING/REVOCATION

Granville Tate, Jr. Secretary March 11, 2019

TABLE OF CONTENTS

GENERAL INFORMATION

Introduction

Trustmark Corporation (Trustmark) is holding its 2019 Annual Meeting of Shareholders (the Annual Meeting) on Tuesday, April 23, 2019. This proxy statement is being sent on or about March 11, 2019, 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.

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, on Tuesday, April 23, 2019, at 1:00 p.m. To obtain directions to attend the meeting, contact the Secretary at 1-601-208-5088 or toll-free at 1-800-844-2000 (extension 5088).

Shareholders Entitled to Vote

Shareholders of record at the close of business on March 1, 2019, are entitled to notice of and to vote at the Annual Meeting in person or by proxy. On the record date, Trustmark had outstanding 65,584,363 shares of common stock.

Required Vote

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:

While abstentions and broker non-votes are counted as shares present at the meeting for purposes of determining a quorum, they are not otherwise counted and, therefore, will have no effect on the outcome of the election of directors or any other proposal.

Applicable rules determine whether proposals presented at shareholder meetings are considered routine or non-routine. If a proposal is considered routine, a bank, broker or other holder of record which holds shares for an owner in street name generally may vote on the proposal without receiving voting instructions from the beneficial owner. If a proposal is non-routine, the bank, broker or other holder of record generally may vote on the proposal only if the beneficial owner has provided voting instructions. A “broker non-vote” occurs when a broker or other entity returns a signed proxy card but does not vote shares on a particular proposal because the proposal is not a routine matter and the broker or other entity has not received voting instructions from the beneficial owner of the shares. The ratification of the selection of Crowe 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 considered non-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 the director nominees 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.

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How to Vote

Shareholders of record can vote in person at the Annual Meeting or by proxy without attending the Annual Meeting. To vote by proxy:

If you hold your shares through a bank, broker or other holder of record, your bank, broker or agent 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 person at the Annual Meeting, you should contact your bank, broker or agent to obtain a legal proxy or broker’s proxy card and bring it to the meeting in order to vote in person.

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.

Revoking Your Proxy

If you are a shareholder of record, you may revoke your proxy at any time before it is voted by written notice to the Secretary, by revocation at the meeting, by 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 and you do not plan to vote in person at the Annual Meeting, you should contact your bank, broker or agent to revoke your proxy or change your vote.

Voting on Other Matters

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.

CORPORATE GOVERNANCE

Overview

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.

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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:

In December 2018, the Board amended Trustmark’s bylaws to provide a one-year exception from the mandatory retirement age of 70 to permit Mr. Summerford to be nominated for election to an additional one-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 under About Us/Investor Relations/Corporate Governance/ Governance Documents 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 under About Us/Investor Relations/Corporate Governance/Governance Documents promptly following any such amendment or waiver. Trustmark may also elect to disclose any such amendment or waiver in a report on Form 8-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 six times in 2018. 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. The Board generally meets jointly with the Board of Directors of Trustmark National Bank (Bank Board). 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, all but one of our directors was present at the annual meeting.

Director Independence

The Board has determined that the following directors and director nominees are “independent directors” (within the meaning of Rule 5605(a)(2) of the NASDAQ Listing Rules):

In conjunction with these independence determinations, the Board considered certain relationships, including through business affiliates, that (i) Messrs. Brown, Puckett and L. Walker, Dr. Hays, Mrs. Conerly and Ms. Cooley have as customers of Trustmark National Bank (the Bank) and its subsidiary, Fisher Brown Bottrell Insurance, Inc. (Fisher Brown Bottrell) and (ii) Messrs. Baker, Brown, Compton, Puckett and L. Walker, Dr. Hays and Ms. Cooley have as

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customers of the wealth management and trust services division of the Bank. 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.

Board Leadership

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 maintaining separate Board Chairman and CEO positions permits Mr. Host to focus on managing Trustmark’s business operations in his role as CEO while Mr. Summerford, as Board Chairman, maintains responsibility for leading the Board in its oversight function and consideration of broader corporate strategy. As an independent Board Chairman, Mr. Summerford, who has a broad business background 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. The Board believes that this leadership structure provides the appropriate balance between strategic development 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.

In the future, if the CEO were to also serve as Board Chairman, the governance guidelines contained in Trustmark’s Board Charter provide that the independent chairman of the Executive Committee would serve as the Board’s Lead Director with primary responsibility for chairing meetings. The Lead Director would also be responsible for referring to the appropriate Board committee any issue brought to his attention by shareholders, directors or others and for serving as the primary communicator between the directors and the CEO. The Board Charter is posted on Trustmark’s website at www.trustmark.com under About Us/Investor Relations/Corporate Governance/Governance Documents/Board Charter.

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 NASDAQ listing standards.

Audit & Finance Committee

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:

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 under About Us/Investor Relations/Corporate Governance/ Governance Documents/Audit & Finance Committee Charter.

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Enterprise Risk Committee

The Enterprise Risk Committee is responsible for monitoring risks that are being taken by Trustmark. The Committee’s responsibilities include:

Executive Committee

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:

Human Resources Committee

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:

All members of the Committee during 2018 and currently are “non-employee directors” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (the Exchange Act), “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, and “independent directors” within the meaning of Rule 5605(a)(2) of the NASDAQ listing rules. The Human Resources Committee Charter is posted on Trustmark’s website at www.trustmark.com under About Us/Investor Relations/Corporate Governance/Governance Documents/Human Resources Committee Charter.

Nominating Committee

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:

The Nominating Committee Charter is posted on Trustmark’s website at www.trustmark.com under About Us/ Investor Relations/Corporate Governance/Governance Documents/Nominating Committee Charter.

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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 Officer 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 these reports enable Trustmark’s directors to understand the risk identification, risk management and risk mitigation strategies employed by Trustmark’s management and the Enterprise Risk Committee. The Board and the Enterprise Risk Committee will request supplemental reports from Trustmark’s management with regard to risk management and risk mitigation strategies as appropriate. This reporting and governance structure ensures 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, 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.

Committee Membership

The following table shows, for 2018, the membership of each committee and the number of meetings held by each committee during the year:

Communications with Directors

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 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, (ii) Trustmark’s independent Hotline at 1-866-979-3769 or (iii) Trustmark’s Ethics Committee Chair at 601-208-6867. Complaints will be investigated by Trustmark’s General Counsel and Director of Audit and reported to the Audit & Finance Committee.

Nomination of Directors

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.

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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 2020 Annual Meeting of Shareholders, such recommendations should be delivered no later than October 1, 2019. 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 the Annual Meeting are current Board members.

Director Qualifications

The Board believes that in order to appropriately carry out its roles, directors must demonstrate a variety of personal traits, leadership qualities and individual competencies. In considering nominees submitted by the Board or management and any recommendations submitted by shareholders, the Nominating 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.

Personal Traits

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:

Leadership Qualities

For individuals considered for Board leadership roles, the following skill sets are required:

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Individual Competencies

There are certain competencies that must be represented collectively by the directors on each Board committee, but each individual director need not necessarily possess all of them. The specific competencies vary by committee, as illustrated in the chart below:

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.

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PROPOSAL 1: ELECTION OF DIRECTORS

The Board has fixed the number of directors for the coming year at 13. The nominees listed herein have been proposed by the Board for election 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 13 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.

The Nominees

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.

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. His extensive experience in this industry has provided him with significant marketing and business leadership skills as well as in-depth understanding of the business climate and customer base in significant Trustmark markets. Mr. Brown 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.

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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.

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.

		Toni D. Cooley, 58    Director of Trustmark since 2013      Trustmark Corporation Committees: ●   Enterprise Risk (Chair) ●   Executive ●   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. 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.

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		J. Clay Hays, Jr., M.D., 53      Director of Trustmark since 2017      Trustmark Corporation Committees:   ●   Enterprise Risk		Career Highlights:   ●   Cardiologist, Partner, President, Jackson Heart Clinic, PA

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 Liability Committee.

		Gerard R. Host, 64      Director of Trustmark since 2010      Trustmark Corporation Committees: ●   Executive		Career Highlights:   ●   President and CEO, Trustmark Corporation ●   President and CEO, Trustmark National Bank

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 his 35-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.

		Harris V. Morrissette, 59      Director of Trustmark since 2016      Trustmark Corporation Committees:   ●   Audit & Finance ●   Human Resources		Career Highlights:   ●   President, China Doll Rice & Beans, Inc. / Dixie Lily Foods ●   Former President and CEO, Marshall Biscuit Company, Inc.           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, provide him with valuable experience in financial institution governance and an understanding of markets that are a strategic focus for Trustmark.

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		Richard H. Puckett, 64      Director of Trustmark since 1995      Trustmark Corporation Committees: ●   Executive ●   Human Resources ●   Nominating		Career Highlights:   ●   Chairman and CEO, Puckett Machinery Company (Distributor of Heavy Earth Moving Equipment and Engine Power Systems)

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 an in-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.

		R. Michael Summerford, 70    Director of Trustmark since 2005    Chairman of the Board since    January 1, 2017      Trustmark Corporation Committees: ●   Executive (Chair) ●   Human Resources ●   Nominating (Chair)		Career Highlights: ●   Former President and COO, ChemFirst, Inc. (Manufacturer of Electronic and Specialty Chemicals)

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.

		Harry M. Walker, 68    Director of Trustmark since 2017      Trustmark Corporation Committees: ●   Executive (non-voting member)		Career Highlights: ●   President, Mississippi Business and Community Relations, Trustmark National Bank (Retired)

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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		LeRoy G. Walker, Jr., 69      Director of Trustmark since 2009      Trustmark Corporation Committees:   ●   Audit & Finance		Career Highlights:   ●   President, LTM Enterprises, Inc. (Retired) (Retail Quick Service Restaurant Consulting and Former McDonald’s Franchisee)

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.

		William G. Yates III, 46      Director of Trustmark since 2009      Trustmark Corporation Committees: ●   Enterprise Risk		Career Highlights:   ●   President and CEO, W.G. Yates & Sons Construction Company

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.

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EXECUTIVE COMPENSATION

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:

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:

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

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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 include the following:

In 2017, the net income and diluted earnings per share figures above have been adjusted for significant non-routine transactions and are non-GAAP financial measures. Reconciliations of these non-GAAP measures to comparable measures calculated in accordance with generally accepted accounting principles can be found under Part II, Item 7 in

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Trustmark Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 19, 2019.

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, Trustmark’s performance resulted in average payouts for the NEOs under the annual management incentive plan of 107%, out of a maximum potential payout of 200%. In recent years, cash bonuses under the annual management incentive plan have averaged approximately 32% of the CEO’s and 25% of the other NEOs’ total annual compensation.

Performance-based equity awards granted in 2018, which represented approximately 17% (for the CEO) and 12% (for the other NEOs) of each NEO’s total annual compensation, will be 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, resulted in vesting of the performance-based restricted stock awards granted in 2016 at a 78% performance-level, out of a maximum potential vesting of 200%. For the same three-year period, Trustmark ranked in the 5th percentile for ROATE and in the 64th percentile for TSR among the 16 peer companies utilized in Trustmark’s 2016 performance-based restricted stock awards.

Time-based equity awards, which in 2018 represented approximately 18% of total annual compensation (for the CEO) and 12% (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% of the target amount for each of the NEOs for the past three years relates directly to Trustmark’s achievement with respect to corporate and line of business budget targets for those years. Vesting of the performance-based equity awards of 78%, 70% and 96% for the three years ended December 31, 2018, 2017 and 2016, respectively, reflects how the amount of this incentive compensation earned depends on Trustmark’s performance, including compared to its peer companies.

2018 Say on Pay Vote. In 2018, the advisory shareholder vote on Trustmark’s executive compensation received approval of over 99.0% of the votes cast on the proposal. In light of such strong support, during the remainder of 2018 and in 2019, the Committee has continued to apply the same compensation philosophy that was described in the 2018 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, 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 Chairman 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 Consultant. The Committee relies on Pearl Meyer to provide information, analyses and advice to aid in the determination of competitive executive and non-employee director pay consistent with Trustmark’s compensation philosophy, and periodically engages Pearl Meyer to test Trustmark’s pay-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

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consideration as part of its process for determining compensation for 2018. The Committee has assessed the independence of Pearl Meyer pursuant to SEC and NASDAQ rules and has concluded that the advice it receives from Pearl Meyer is objective and not influenced by other relationships that could be viewed as conflicts of interest.

With respect to Trustmark’s compensation program for executives and non-employee directors for 2018, Pearl Meyer’s services for the Committee included:

Benchmarking. 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 its pay-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 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 list of 20 financial institutions with median assets closer to Trustmark’s size.

As of September 30, 2017, the 20 peer companies all had assets within a range of approximately 74% to 224% 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 2017 ranged from approximately $10.3 billion to $31.1 billion, and the market capitalizations ranged from approximately $2 billion to $6 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, Trustmark’s peer group consisted of the following companies:

Market Data.    In making its 2018 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.

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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 than one-half of the CEO’s compensation is contingent on performance, and approximately one-half of the compensation provided to the other NEOs is contingent on performance. 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, 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 2018 for the CEO and other NEOs were as follows:

The compensation elements for the CEO for 2018 were allocated as follows: 33% for base salary, 32% for cash bonus, and 35% for equity awards. On average, the compensation elements for the other NEOs for 2018 were allocated as follows: 47% for base salary, 29% for cash bonus, and 24% for equity awards. 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” table on page 27.

Base Salaries. Trustmark’s goal is to provide its executive management with fixed cash compensation in the form of base salary that will attract and retain highly qualified executives. Trustmark also uses base salary to reward top performance, industry and job specific knowledge, experience and leadership ability. The base salaries for Trustmark’s NEOs are typically established in the first quarter of the year after Trustmark’s financial information and performance results from the previous year are available, although mid-year adjustments are made occasionally to reflect changes in responsibility or other developments.

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 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.

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Effective March 1, 2018, the Board approved a 2% increase in base salary for Messrs. Host and Greer, and the Bank Board approved a 2% increase in base salary for Messrs. Dewey, Stevens and Tyler. The base salaries in effect during 2017 and 2018 were as shown below:

Cash Bonuses. The Committee typically awards cash bonuses utilizing a structured, objective approach based upon the achievement of performance objectives set forth in an annual management incentive plan. Cash bonuses constitute the largest cash component tied specifically to company performance.

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 significant non-routine transactions), credit quality measures and non-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.

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. 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 following are the primary features of the management incentive plan for 2018:

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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:

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:

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:

Depending on achievement against the stated goals, the payout percentage, if any, for 2018 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.

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The following table shows the relevant performance goals established for 2018 under the management incentive plan and the extent to which such goals were achieved:

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 bonus amounts for all NEOs were approved by the Committee and by the Bank Board in February 2019. On or about March 15, 2019, Trustmark will pay the following annual cash bonuses for 2018 performance under the management incentive plan:

These 2018 annual cash bonus amounts are presented as Non-Equity Incentive Plan Compensation for 2018 in the “Summary Compensation Table for 2018” on page 26, including Mr. Tyler’s mortgage production bonus.

Mortgage Production Bonus. In recognition that a quarterly production bonus is very common for executives in mortgage banking, and in an effort to remain competitive with Trustmark’s peer companies, Mr. Tyler receives a quarterly production bonus based on the mortgage department’s production, in addition to the annual cash bonus under the management incentive plan. Mr. Tyler’s production bonus is based on a percentage of total mortgage production above a threshold production level each quarter for mortgages that conform to the Bank’s origination guidelines, subject to an annual cap. The specific formula is not publicly disclosed for competitive reasons.

Equity-Based Compensation. Equity-based awards generally constitute the largest non-cash component of each NEO’s total compensation package. In setting the amount of annual equity-based awards, the Committee takes into account levels of long-term equity-based compensation and pay mix data at its peer companies using published surveys, based on input from Pearl Meyer. All members of the Executive Strategy Committee (other than the CEO), which includes Messrs. Greer, Dewey and Stevens, receive the same annual equity-based award and all other members of executive management receive 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 LTI equity awards were increased from $650,000 to $800,000 for the CEO and

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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 awards made in 2018, 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 restricted stock grants, which vest 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-based awards.

Performance-based Awards. The performance-based equity awards consist of a dual award of restricted stock and an equal number of restricted stock units. The restricted stock vests based on performance over a three-year period up to 100%, and the restricted stock units vest based on performance over the same three-year period exceeding 100% (up to a maximum of 200%). To the extent earned, the restricted stock units are settled in unrestricted shares issued after 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 stock and restricted stock units to vest fully (to the extent earned). No interest is paid on the accumulated dividends. No dividend equivalents are accumulated on the restricted stock unit portion of the award.

Time-based Awards. The time-based awards granted in 2018 vest 100% at February 15, 2021, if the executive remains employed through such date (subject to certain exceptions). Dividends on any time-based restricted stock are accumulated and will vest and be paid only when and to the extent the shares to which they relate vest, subject to a six-month delay when required by Section 409A.

The following table reflects the grant date fair values of the performance-based restricted stock and restricted stock unit awards and time-based restricted stock awards granted to the NEOs in 2018:

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The following table reflects the values realized by the NEOs on vesting of performance-based restricted stock awards and time-based restricted stock awards that vested during 2018 from grants made in prior years. See the “Option Exercises and Stock Vested for 2018” table on page 30 for more information.

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 and pre-retirement death benefits based upon a retirement benefit amount for each participant established by the Committee. The retirement benefit amount is based on the participant’s level of responsibilities and, in part, on his specified covered salary.

The following table shows, as to each NEO, annual retirement benefits anticipated to be paid at normal retirement:

The plan permits early retirement at or after age 55 with five years of plan participation. Benefits at early retirement are actuarially reduced. The plan also provides a deferred vested benefit payable at normal retirement age to a participant terminating for reasons other than retirement with at least one year of plan participation or retiring early with a pre-existing election to be paid commencing at his or her normal retirement date. Normally, the deferred benefit is accrued and vests at the rate of 1/10th of the anticipated normal retirement benefit for each year of plan participation for a maximum of 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.

See the “Pension Benefits for 2018” table on page 31 for more information regarding this plan.

Non-Qualified Deferred Compensation Plan. Trustmark also provides a Non-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 a pre-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

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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. See the “Non-Qualified Deferred Compensation for 2018” table on page 31 for more information regarding this plan and see the “Summary Compensation for 2018” table on page 26 and the “All Other Compensation for 2018” table on page 27 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’s responsibilities. Generally, Trustmark limits the types of perquisites offered to NEOs as shown in the “All Other Compensation for 2018” table on page 27.

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. Host 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. In addition, the Board authorizes an annual allowance of up to 15 hours of personal use of Trustmark’s airplane for the CEO, which provides an efficient way to maximize his 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 accelerated vesting upon a change in control and upon certain termination events, and an incremental benefit is provided under the Executive Deferral Plan upon certain termination events following a change in control.

In light of the CEO’s and other NEOs’ role and importance to the success of Trustmark, the Committee believes that it is appropriate to provide for severance and change in control benefits in written agreements. 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 tax gross-ups related to severance or other compensation or benefits that executives may receive in connection with a change in control. Change in control benefits are provided on a “best net” approach, under which an executive’s change in control benefits are reduced to avoid the golden parachute excise tax only if such a reduction would cause the executive to receive more after-tax compensation than without a reduction.

For additional information on Trustmark’s employment and change in control agreements with its NEOs, please see “Employment and Change in Control Agreements with NEOs” beginning on page 33.

Deductibility of Compensation. In making compensation decisions, the Committee considers Section 162(m) of the Internal Revenue Code, which limits the tax deductibility of certain compensation in excess of $1 million paid to Trustmark’s NEOs.

Although tax deductibility continues to be a consideration when determining executive compensation levels, the Committee believes that factors other than tax deductibility should take precedence in certain situations. Given the competitive market for outstanding executives, for example, the Committee believes that it is important to retain the flexibility to determine compensation elements consistent with Trustmark’s compensation philosophy, even if some executive compensation is not fully deductible under Section 162(m). Accordingly, the Committee does approve elements of compensation for certain executives that are not fully deductible by Trustmark and reserves the right to do so in the future when appropriate. In 2018, a portion of Mr. Host’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

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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 and other members of executive management to own a minimum number of shares of Trustmark stock equal in value to a multiple of their base salary in effect when appointed CEO or a member of executive management, as follows:

The guidelines provide that the applicable ownership level should be reached within five years from the date of appointment as CEO or as a member of the executive strategy committee or executive management, as applicable. Pledged shares are not considered to be owned for purposes of the stock ownership guidelines. The Human Resources Committee reviews stock ownership levels of executive management annually. Until an executive has reached the applicable ownership level, the executive is required to hold 100% of the shares received from any Trustmark stock awards. Based on review of ownership level attainment in 2018, all NEOs own the minimum number of shares required to satisfy the guideline.

Executive Compensation Recoupment. Since 2011, the Committee has included clawback provisions in performance-based restricted stock 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 stock 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 2018 and early 2019, the Committee, together with Trustmark’s risk officers, conducted an in-depth risk assessment of Trustmark’s compensation policies and practices. Management prepared detailed materials regarding the operation of Trustmark’s various compensation arrangements with its associates and submitted the materials to Trustmark’s risk officers, who reviewed the materials with the members of management most closely involved with the respective compensation arrangements. Trustmark’s risk officers identified the key enterprise risks to which Trustmark is subject, including credit, liquidity, market/interest rate, compliance, operational, technology, strategic, reputational and other risks, and focused their review on the compensation arrangements most likely to implicate those risks. Trustmark’s 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.

The Committee has concluded that Trustmark’s compensation policies and practices have sufficient mitigating features and controls to maintain an appropriate balance between prudent business risk and resulting compensation, and encourage appropriate risk behavior consistent with Trustmark’s risk appetite, business strategy and profit goals. Some of the mitigating features and controls used are the overall compensation mix, weighting of performance metrics, timing of awards in relation to performance measurement period, use of full value equity-based awards with multi-year vesting periods, and establishment of targets with payouts at multiple levels of performance, chargeback provisions on returned or unearned commissions, capped upside opportunities, and oversight by executive management and the Board. In addition, Trustmark’s incentive compensation arrangements are subject to a system of internal controls to ensure that incentive compensation is properly tracked, approved and paid. Trustmark’s internal controls include comparisons throughout the year of performance results against performance requirements, approval by appropriate levels of management, the Committee, the Board and/or the Bank Board of incentive compensation payouts, with separate review and approval by division controllers of lines of business that have significant incentive compensation payouts, and coordination among human resources, accounting, and payroll personnel to ensure that incentive compensation payouts that have been approved are appropriately reconciled to those approvals before and after payment is made. As a result, the Committee concluded that Trustmark’s compensation policies and practices are not reasonably likely to have a material adverse effect on Trustmark, do not encourage imprudent risk-taking behavior and are consistent with maintaining the organization’s safety and soundness.

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Summary Compensation Table for 2018

The following table summarizes the compensation components for the CEO, the CFO and each of the next three most highly compensated executive officers during 2018 and indicates their positions as of December 31, 2018. Although considered “officers” of Trustmark Corporation under the Exchange Act, the NEOs’ compensation, except for equity awards under Trustmark’s stock and incentive compensation plans, is paid by the Bank. The amounts reported in the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” column were not paid to the NEOs in any year shown. These amounts represent the annual change in the present value of potential future benefits the NEOs might receive upon retirement, assuming the benefits have vested.

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All Other Compensation for 2018

The detail of all other compensation for 2018 is included in the following table:

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Grants of Plan-Based Awards for 2018

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, 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:

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Outstanding Equity Awards at 2018 Fiscal Year-End

The following table presents information regarding unvested performance-based restricted stock and restricted stock unit awards and time-based restricted stock awards held by NEOs at December 31, 2018. 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.