RENASANT CORP

In late 2022 and early 2023, the compensation committee met to consider our 2023 executive compensation program. By that time, the Federal Reserve had aggressively increased the federal funds rate in an effort to combat inflation, with the federal funds rate set at a range of 4.25% to 4.50% by mid-December. As 2022 closed many analysts believed that, although some additional tightening in monetary policy was likely, the Federal Reserve was nearing the end of its aggressive rate-raising efforts. When the compensation committee met in late 2022 and early 2023 to consider the 2023 executive compensation program, it recognized that growing net interest income and lowering our efficiency ratio would be a challenge in an inflationary, rising rate environment, but the committee otherwise expected 2023 to be generally a normal operating environment for financial institutions. The March 2023 bank failures and resulting liquidity crisis were still a few months away. Accordingly, the compensation committee continued to structure our executive compensation program to focus on stable, long-term growth, alignment with shareholder interests and the retention of key talent. Managing our operational efficiency remained a strategic goal in 2023, even if the inflationary environment still prevailing in the economy was not conducive to achieving significant reductions in the efficiency ratio.

In March 2023, Silicon Valley Bank and Signature Bank failed unexpectedly, and Silvergate Bank underwent an orderly liquidation. Many banks, including Renasant, responded to these events by immediately adding on-balance sheet liquidity to address customer, shareholder and banking regulators’ concerns about uninsured deposits and customer flight to the safety of “too big to fail” financial institutions. Our response, although necessary given the circumstances, had a material negative impact on Renasant’s earnings and profitability.

Renasant’s compensation committee began to monitor and discuss the impact of the March 2023 bank failures and the other macroeconomic factors on the Performance Based Rewards Plan (the “PBRP”) performance metrics as early as its April 2023 meeting. The committee elected not to change any metrics or take any other immediate action, preferring to observe how the remainder of 2023 unfolded (and what other macroeconomic developments might positively or negatively affect our performance) and then assess the Company’s performance in this environment on a stand-alone basis and relative to its peers’ performance under the same conditions. The compensation committee had five meetings after March 2023 during which it discussed the performance of our senior executives and the overall performance of the Company (there were other meetings as well). At these meetings, the compensation committee received regular updates from management about the performance of the Company, as well as updates about the industry and other macroeconomic trends. In its meetings in early 2024 to discuss the Company’s performance in 2023, it was apparent that, despite management’s efforts to mitigate the negative impacts of the March 2023 bank failures and the resulting liquidity crisis, these events rendered the achievement of even the threshold levels of performance under the PBRP practically unattainable.

The compensation committee further noted the extraordinary efforts of management, led by our NEOs, in not only leading the Company through the crisis, but also in maintaining the stability of the Company. As a result, the committee awarded discretionary bonuses to our NEOs, as described in more detail below in the “2023 Compensation Decisions” section.

One additional aspect of our named executives’ 2023 compensation was determined in early 2023. As discussed in more detail under the “Equity Awards” heading in the “2023 Compensation Decisions” section, the compensation committee considered the impact of management’s strategy in 2021 and 2022 to strengthen our balance sheet by maintaining a top-of-peer allowance for credit losses on the outcome of the performance-based equity awards that vested on December 31, 2022. To address the impact of our shareholder-focused strategy on these awards, in March 2023 the compensation committee made one-year time-based restricted stock awards to executives who had received the affected performance-based equity awards.