Pulmatrix Inc

Pay versus Performance Disclosure

The following section has been prepared in accordance with pay versus performance rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Under these new rules, the SEC has developed a definition of pay, referred to as Compensation Actually Paid (“CAP”). We are required to calculate CAP for our Named Executive Officers and then compare it with certain Company performance measures. Shareholders should refer to our compensation philosophy discussion and analysis in this Proxy Statement for a complete description of how executive compensation relates to Company performance measures and how the Compensation Committee makes it decisions related thereto. The Compensation Committee did not consider this SEC-required pay versus performance analysis and disclosure below in making its pay decisions for any of the years shown.

Pay Versus Performance Table

The following table shows the past three fiscal years’ total compensation for our Named Executive Officers as set forth in the Summary Compensation Table (“SCT”), the CAP to our Named Executive Officers (as determined pursuant to SEC rules), our total shareholder return (“TSR”), and our net loss. We are a “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act, and have elected to provide in this proxy statement certain scaled disclosures permitted under the Exchange Act for smaller reporting companies.

SEC rules require certain adjustments be made to the SCT totals to determine CAP as reported in the pay versus performance table. CAP does not necessarily represent cash and/or equity value transferred to the applicable Named Executive Officer without restriction, but rather is a valuation calculated under applicable SEC rules. The methodology for calculating CAP as required by Item 402(v) of Regulation S-K takes into account, among others, changes in share price and its impact on the fair value of equity awards.

The table below summarizes the adjustments to the total amount reported in the SCT for the PEO and Non-PEO Named Executive Officers (“Non-PEO NEOs”) in calculating CAP for the current fiscal year:

Analysis of the Information Presented in the Pay versus Performance Table

Compensation Actually Paid and Net Loss

The following chart sets forth the relationship between CAP to our PEO, the average CAP to our Non-PEO Named Executive Officers, and our net loss during the three most recently completed fiscal years.

From 2021 to 2022, our net loss increased and the CAP to our PEO and Non-PEO Named Executive Officers also increased between those years.

From 2022 to 2023, our net loss increased and the CAP to our PEO decreased, while the CAP to our Non-PEO Named Executive Officers increased.

Compensation Actually Paid and Cumulative TSR

The following chart sets forth the relationship between CAP to our PEO, the average CAP to our Non-PEO Named Executive Officers, and the Company’s cumulative TSR over the three most recently completed fiscal years.

From 2021 to 2023, the value of an initial fixed $100 investment in our common stock based on cumulative TSR decreased each year, and the CAP to our PEO and Non-PEO Named Executive Officers increased between those years. Equity awards are a significant component of our executive compensation program. Therefore, cumulative TSR has a significant impact on our CAP, particularly for executives who have been with us for several years and who have multiple years of outstanding awards. The impact is more pronounced for our PEO, given the heavier weighting of stock options as part of his compensation versus the other Named Executive Officers. The methodology for calculating CAP as required by Item 402(v) of Regulation S-K takes into account, among others, the weighting of equity in our compensation programs and the decline in our stock price during 2021, which resulted in lower CAP for our PEO in 2021.