shareholders, and to ensure that he is incentivized not to take actions that may benefit the company and its shareholders in the short-term at the expense of long-term corporate value creation and sustainability. In particular, our board and compensation committee were sensitive to how Mr. Byrne’s leadership and actions could further our various objectives, including human capital development and executive succession planning. The terms of Mr. Byrne’s employment agreement are discussed in more detail below.
Base Salaries. The committee determines levels of our executive officers’ base salaries so as to be competitive with amounts paid to executives performing similar functions in comparable size non-durable manufacturing companies. The amount of each executive officer’s annual increase in base salary, if any, is based on a number of largely subjective factors, including changes in the individual’s duties and responsibilities, the personal performance of such executive officer, the performance of the company, cost-of-living increases, and such other factors as the committee deems appropriate, including the individual’s overall mix between fixed and variable compensation and between cash and stock-based compensation. In the case of Mr. Byrne, his employment agreement provides for a minimum base salary.
Mr. Byrne’s base salary is reviewed annually for adjustment effective January 1. The base salaries of our other executive officers are also reviewed annually for adjustment. In determining salary increases in 2021, the primary factors considered were the executive officers’ individual performances, the performance of the company and the cost-of-living. Salary rate increases for Messrs. Byrne, Riggs, Stone and Wiedemer in 2021 were 4.3%, 3.5%, 3.5%, and 3.7%, respectively. The 2022 salary rate increase for Mr. Byrne was 5.2%, effective January 1, 2022, to $505,000. The salary rate increases for the remaining executive officers, other than Mr. Byrne, for 2022 have not yet been determined.
Annual Cash Bonuses. Each of our executive officers is eligible to receive annual cash bonuses based on discretionary determinations made by the committee. Except in the case of Mr. Byrne, we have not adopted a formal or informal annual bonus arrangement with pre-set performance goals. Rather, the committee’s determination to pay a cash bonus, if any, is made in December each year based on the committee’s subjective judgment with respect to the past performance of the individual and the company or on the attainment of non-quantified performance goals during the year. In either such case, the discretionary bonus may be based on the specific accomplishments of the individual and/or on the overall performance of the company. Discretionary bonuses are normally paid after our earnings for the applicable year are released. The amounts of the discretionary bonuses for 2021 paid in 2022 were based on each executive officer’s individual performance and accomplishments, including contributions made to our modernization and expansion and development projects, during 2021 and are reflected in the Summary Compensation Table. With respect to Mr. Byrne’s discretionary bonus, for 2021 paid in 2022, the committee also took into account his leadership and actions to further our ESG and sustainability objectives, including human capital development.
In the case of Mr. Byrne, in addition to the possibility of a discretionary cash bonus in the subjective judgment of the committee, Mr. Byrne’s employment agreement provides that he was entitled for 2021 to an objective annual cash bonus opportunity under our 2001 Plan based on our 2021 EBITDA (earnings before interest, taxes, depreciation, and amortization, computed without regard to the effects of any awards granted under our 2001 Plan) of $200,000 if EBITDA was $38,000,000; $250,000 if EBITDA was $41,000,000; $300,000 if EBITDA was $44,000,000; and the greater of $460,000 or his base salary at the start of the performance year if EBITDA was equal to or greater than $50,000,000. Any such EBITDA cash bonus for 2021 would be prorated between breakpoints, if required. In 2021, our EBITDA as calculated under this agreement exceeded $50,000,000. As a result, we paid Mr. Byrne in 2022 an EBITDA cash bonus for 2021 of $480,000, equal to the amount of his base salary for 2021. For 2022, Mr. Byrne’s maximum EBITDA cash bonus is $505,000, equal to the amount of his base salary for 2022.
Stock-Based Awards. The committee also administers our 2001 Plan to provide stock-based incentives to our key employees, including our executive officers. Grants of stock options, shares of restricted stock and other possible stock-based awards are based on each individual’s position within the company, level of responsibility, past performance and expectation of future performance. In determining the number of stock-based awards to be granted to each executive officer, the committee also considers the number of stock-based awards made in prior years to the executive officer, as well as the company’s performance and the market price of our common stock.
Grants of stock-based awards to Mr. Byrne are made on the last business day of the calendar year as set forth in his employment agreement. Grants to other executive officers are made on or soon after the date that our earnings for the preceding calendar year are released. The committee also may make grants to executive officers at other times during the year in connection with new hires or promotions. The exercise price for stock options is set at the closing per share market price of our common stock on the date of grant.