Finance

A shopper leaves a Home Depot with merchandise that she purchased on August 17, 2021 in Alexandria, Virginia.
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Check out the companies making headlines in midday trading.
Home Depot — Shares of Home Depot jumped 5.7% after the home improvement retailer beat on earnings. The company reported earnings of $3.92 per share on revenue of $36.82 billion. Analysts expected earnings of $3.40 on revenue of $35.01 billion, according to Refinitiv.

Robinhood — Shares of the stock trading app ticked 3.1% lower in midday trading after Atlantic Equities downgraded Robinhood to neutral from buy, saying in a note to clients that there is little reason for shares to rebound in the coming months with such inconsistent growth.
SoFi Technologies — Shares of the fintech company dropped 5.5% in midday trading after announcing a secondary offering of 50 million shares of its common stock by certain selling shareholdings.
Peloton — Shares of the stationary bike company popped 15.5% in midday trading after announcing it plans to sell roughly 23.9 million shares of its Class A common stock at a public offering price of $46, netting the company about $1.07 billion. The announcement comes as Peloton is looking for ways to shore up cash amid slowing momentum for its products.
Rivian — Rivian shares continued to rally less than a week after the company went public in one of the biggest IPOs of the year. The stock rose 15.2% in midday trading, signaling investors are bullish on the Tesla rival backed by Amazon and Ford.
Walmart — The big box retailer saw its shares pulling back 2.6% even after a stronger-than-expected quarterly report. Walmart reported third-quarter profit and revenue above estimates. Its U.S. same-store sales jumped 9.2%, excluding fuel, year over year, while Walmart also raised its forecast for the full year,

Rackspace Technology — Shares of the cloud computing company soared 11.4% in midday trading after beating estimates by a penny with adjusted quarterly earnings of 25 cents per share. Rackspace Technology’s revenue also topped Wall Street forecasts.  It was Rackspace’s 8th consecutive quarter of revenue growth, and the company said it was well positioned in a booming market. 
QuantumScape — The battery stock dropped 9% on Tuesday after Morgan Stanley downgraded QuantumScape to neutral from buy. The investment firm said that rising competition would eat away at the company’s technology lead in the race for next generation batteries.
Floor & Decor — Shares of the flooring company jumped 6% after Warren Buffett’s Berkshire Hathaway disclosed a near $100 million stake in a regulatory filing Monday evening. The conglomerate bought 816,900 shares of Floor & Decor in the third quarter, the filing showed. Floor & Decor has rallied more than 40% this year following a nearly 83% jump in 2020 on the back of the pandemic boom.
Axon Enterprise — Shares of Axon Enterprise, which makes tasers, body cameras and other public safety equipment, rose 6.2% after reporting strong sales and revenue for its latest quarter.
Autoliv — Shares of the automotive company gained 6.1% after Autoliv announced a share repurchase program of up to $1.5 billion over the next three years, while also providing upbeat guidance. The company also introduced a long-term sales growth target of between 4% and 6% per year starting in 2024.
Lucid Group — Shares of the electric vehicle maker surged 23.7% a day after reporting more than 17,000 reservations for its “Air” sedan, up from 13,000 in the prior quarter. Lucid also confirmed its 2022 production targets.
— with reporting from CNBC’s Yun Li, Pippa Stevens, Jesse Pound and and Hannah Miao.

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The Build Back Better Act would let same-sex couples file an amended tax return for years they were legally married before 2010. For some, that might be as early as 2004.
IRS guidance after a Supreme Court ruling in United States v. Windsor only allowed for such amended returns back to 2010.
Not all couples would necessarily get a tax benefit from filing new returns due largely to the marriage penalty.

Tetra Images | Tetra images | Getty Images

United States v. Windsor

The current gap in tax rules for some same-sex married couples dates to a Supreme Court decision in 2013, United States v. Windsor, which struck down part of the Defense of Marriage Act.

The ruling required the federal government to recognize same-sex marriages in states where they were legal.
Following the Windsor case, the IRS issued guidance that let taxpayers amend their tax returns with respect to their marital status, but only generally back to 2010, according to a Nov. 3 summary of the Build Back Better Act.

However, same-sex marriage was legal in five states (Connecticut, Iowa, Massachusetts, New Hampshire and Vermont) plus Washington, D.C., before 2010, according to the Pew Research Center.
(Massachusetts became the first state to legalize the unions, in 2003, after its Supreme Judicial Court ruled that the state constitution gives gay and lesbian couples the right to marry, according to Pew; weddings began in 2004. The U.S. Supreme Court later legalized same-sex marriage nationwide, in 2015, in Obergefell v. Hodges.)
Gay and lesbian couples who legally wed before 2010 would be able to file an amended tax return if Congress passes the Build Back Better Act with the provision intact.

This is a fair thing to do.

Steve Warnoff
director of federal tax policy at the Institute on Taxation and Economic Policy

“This is a fair thing to do,” said Steve Wamhoff, director of federal tax policy at the Institute on Taxation and Economic Policy. “People were married [but] the federal government wasn’t recognizing their marriages.”
While fair in terms of tax policy, it’s questionable whether many couples would make the effort to redo their tax returns and take advantage of new rules, Wamhoff said.

Marriage penalty

It’s also not a given that all married couples would benefit from filing a joint return instead of as single taxpayers.
Same-sex couples who’d benefit most from new rules would likely be those in which one spouse is a high earner and the other has little to no income, Levine said.
That’s largely due to the so-called marriage penalty, which is most common when each spouse earns a similar income.

For example, in 2004, single taxpayers were in the 28% tax bracket if their income exceeded $70,350. However, instead of a level twice that amount, married couples filing a joint tax return hit the 28% rate once income exceeded $117,250.
That basically meant married couples jumped into that tax rate more easily with respect to their income. (There’s still a marriage penalty, but a federal tax law in 2017 temporarily eased it.)
Married couples may also be able to claim certain tax benefits unavailable to single filers, Levine said.
For example, if a higher-earning spouse had paid for medical or education expenses for the other spouse pre-2010, the high earner couldn’t claim medical or education tax breaks for those costs on their individual return, Levine said. They’d perhaps be able to do so on a married-joint return.

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Parents can currently get a child tax credit of up to $3,000 per child under 18 years old, and $3,600 for kids under age 6. That value is poised to drop to $1,000 per kid after 2025.
The current version of Democrats’ Build Back Better Act would only extend the current credit for another year, through 2022.
However, the legislation would make the credit fully refundable permanently.

MoMo Productions

The child tax credit is poised to get a significant haircut by mid-decade, even if Democrats pass the most recent version of their $1.75 trillion social and climate plan.
Starting in 2026, the value of the tax break for parents would plunge by more than two-thirds relative to current law, to $1,000 per child from a maximum $3,600, if Congress doesn’t intervene.

That possibility is due to key aspects of two laws: a 2017 tax law passed by the Republican-controlled Congress, and the American Rescue Plan passed in March by the current Democratic majority.
Both laws raised the credit’s value (among other changes) — but only temporarily.
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The 2017 law boosted it to $2,000 per child under 17 years old, up from $1,000. The American Rescue Plan enhanced it further for low- and middle-income parents: up to $3,000 per child under 18, and $3,600 for kids under 6.
The American Rescue Plan Act, a pandemic relief measure, only raised the value for 2021. The 2017 law, known as the Tax Cuts and Jobs Act, raised it through 2025.

At that point in time, the value would fall to the level pre-Tax Cuts and Jobs Act. However, Congress won’t necessarily let the tax credit revert to its $1,000 value.
“There’s a long history of the child tax credit being expanded temporarily, and when the deadline hits it gets extended again,” said Elaine Maag, a principal research associate at the Urban-Brookings Tax Policy Center, who specializes in income-support programs for low-earning families. “So it’s not clear to me we should assume the whole tax law will come back in.”

Low-income families

If existing law does expire, low-income households would bear the brunt of the impact, while middle and high earners would generally see limited to no impact, Maag said.
That’s because other aspects of the tax code would revert to pre-Tax Cuts and Jobs Act status for households after 2025.
Most significantly, while the child tax credit’s value would fall, the personal exemption would also come back. The provision lets taxpayers exempt $4,050 of income (for themselves and each of their dependents) from tax.
However, lower earners (who may have little to no taxable income to offset) might not get a significant financial benefit.
“For low-income families, they received very few benefits from the exemption,” Maag said.

Democrats are trying to preserve aspects of the American Rescue Plan’s enhancements in legislation to expand the social safety net and tackle climate change.
The current version of the bill, which may change, would temporarily preserve the child tax credit’s current value, for 2022. It would also continue paying the credit in a monthly income stream for parents whose income is below $75,000 (single) or $150,000 (married) a year.
But it would also make permanent another of the American Rescue Plan’s key changes: making the credit fully refundable.
That means low earners would get the full value of the credit regardless of their income or tax liability. Prior to the pandemic relief law, this wasn’t the case — meaning nearly all the credit’s benefits went to middle-earning households, Maag said. (The highest earners weren’t eligible.)

This full-refundability policy would help reduce the number of children living in poverty even if the credit’s value falls, Maag said.
The House aims to pass the legislation, the Build Back Better Act, this week. It would then head to the Senate, where Democrats can’t afford to lose a vote due to uniform Republican opposition.
An earlier version of Democrats’ legislation, originally pegged at $3.5 trillion rather than the current $1.75 trillion, would have extended the credit’s current value (a maximum $3,600 per kid) and monthly-payment structure through 2025 instead of 2022. The party scaled back the measures after cost objections from centrist holdouts, Sen. Joe Manchin, D-W.V., and Sen. Kyrsten Sinema, D-Ariz.

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British software company Blue Prism said U.S.-based SS&C has offered £12 a share to buy the firm.
That’s higher than a £11.25-a-share takeover bid from private equity firm Vista.
Shares of Blue Prism surged as much as 10% on the news.

Lines of code displayed on a computer screen.
Degui Adil / EyeEm | EyeEm | Getty Images

LONDON — Shares of Blue Prism surged Tuesday after the British software company disclosed it received a takeover offer from U.S.-based tech firm SS&C Technologies Holdings, setting off a potential bidding war.
London-listed Blue Prism has already agreed a deal to go private in a nearly £1.1 billion ($1.47 billion) sale to American private equity firm Vista Equity Partners.

But the company revealed on Tuesday that SS&C, a Windsor, Connecticut-based firm that sells financial services software, had submitted an offer of £12 per share for the company.
That’s higher than the £11.25-a-share bid from Vista, and would give the company a slightly higher valuation of $1.56 billion based on its most recent outstanding share count.
“The Board is currently evaluating the SS&C Proposal with its financial adviser, Qatalyst Partners Limited,” Blue Prism said in a statement Tuesday. “There can be no certainty that any firm offer will be made by SS&C.”
Blue Prism will adjourn a shareholder meeting on the Vista offer to explore the takeover approach from SS&C, the company said. The firm said management still believes the sale to Vista to be in the “best interest” of shareholders and recommends moving ahead with it.
“A further announcement will be made if and when appropriate,” Blue Prism said.

Shares of Blue Prism surged as much as 10% on the news Tuesday. The stock closed the session up 9% at £12.20, giving it a higher price than that offered by both SS&C and Vista.

Investors have expressed concern over the proposed takeover of Blue Prism by Vista, arguing it represents poor value for shareholders and a huge discount to competitors.
Blue Prism sells what’s known as robotic process automation technology, or the use of metaphorical software robots to automate repetitive tasks in the workplace.
It competes with the likes of U.S.-headquartered UiPath, which listed in New York and has a market cap of over $28 billion, and Automation Anywhere, a privately-held firm last valued at $6.8 billion.
Activist investor Coast Capital is mounting a challenge to the Blue Prism-Vista deal. The firm is in discussions with other disgruntled investors and says around 30% of shareholders are prepared to block the acquisition.
One Blue Prism investor told CNBC the chances of the deal getting approved were looking increasingly slim.
“I think it’s right on the cusp,” David Brown, founder of investment manager Hawk Ridge, said in an interview last week. “I think it’s slightly more likely that it gets rejected.”
Later Tuesday, Coast Capital issued a statement offering its support for the SS&C bid.
“We believe that the bid by SS&C for Blue Prism will, if successful, help transform SS&C into the clear tech leader (and therefore services leader) in the fund admin space,” Coast Capital Founding Partner James Rasteh said.
“This is a visionary move and is indicative of a visionary management team.”

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Upgrade, the fintech start-up that turns credit card balances into installment loans, has closed a fundraising round that values the company at $6.28 billion, CNBC has learned.
The company raised $280 million in its Series F round led by new investors Coatue Management and DST Global, according to Upgrade CEO Renaud Laplanche. That’s an 83% jump from a previous round this year that valued Upgrade at $3.43 billion, he said.
Most of that increase stemmed from steep growth in the San Francisco-based company’s revenue, which climbed 70% between June and October, the two fundraising periods, Laplanche said in a Zoom interview.

Upgrade CEO Renaud Laplanche speaks at a conference in Brooklyn, New York, in 2018.
Alex Flynn | Bloomberg via Getty Images

Upgrade, the fintech start-up that turns credit card balances into installment loans, has closed a fundraising round that values the company at $6.28 billion, CNBC has learned.
The company raised $280 million in its Series F round led by new investors Coatue Management and DST Global, according to Upgrade CEO Renaud Laplanche. That’s an 83% jump from a previous round this year that valued Upgrade at $3.43 billion, he said.

Most of that increase stemmed from steep growth in the San Francisco-based company’s revenue, which climbed 70% between June and October, the two fundraising periods, Laplanche said in a Zoom interview.
Upgrade’s main product is a card that turns purchases into fixed-rate installment loans, making the start-up the latest company to benefit from the “buy now, pay later” trend in fintech. While traditional cards charge more than 18% in interest annually, the Upgrade card starts at 8.99%, said Laplanche. That has made it one of the fastest-growing cards in the country, according to the industry newsletter Nilson Report.
“Consumers are discovering the benefit of a product that gives them all the convenience of a credit card but doesn’t push them further into debt,” Laplanche said. “Traditional credit cards are a really bad consumer product with very high interest rates and lots of fees. They’re really designed to keep people in debt as long as possible.”
Fintech companies that take aim at the huge market for U.S. consumer credit include “buy now, pay later” fintech Affirm as well as more diversified players including SoFi, Goldman Sachs’ Marcus brand and Lending Club, which was co-founded by Laplanche.
But consumer lending is still dominated by credit card giants at traditional banks including JPMorgan Chase and Citigroup. They have little incentive to copy some of fintech’s more consumer-friendly features because that would reduce profits from their massive card loan portfolios, Lapanche said.

“They have no interest in changing that behavior,” he said. “The Upgrade card is an innovation that should’ve come from the banks, but didn’t. It’s less profitable than a traditional card because the balance comes down faster, but it’s a better deal for consumers.”
Like other fintech players aiming to eventually become digital one-stop shops for consumer finance, Upgrade has begun branching out. It offers checking accounts, a 2% cash-back debit card and a credit card that pays rewards in bitcoin. About 10% of new cards issued by the start-up are bitcoin rewards cards, Laplanche said.
The company is making preparations to be ready to go public as early as 2023, he said.
“We are growing fast and being profitable,” Laplanche said. “We are working on being ready in about 18 months from now.”

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Fueling Change

Allianz’s Mohamed El-Erian says he purchased an unspecified amount of bitcoin when it plunged close to $3,000 in the “crypto winter” of 2018.
He subsequently sold in late 2020, when bitcoin regained the $19,000 level. A few months later, the digital coin hit a record high above $60,000.
The economist said he would only feel comfortable buying again once some of the speculators in the market are “shaken out.”

Famed economist Mohamed El-Erian says he bought some bitcoin a few years ago — but misjudged when to sell due to “behavioral mistakes.”
The Allianz chief economic advisor revealed he purchased an unspecified amount of bitcoin in the “crypto winter” of 2018, when the world’s largest digital coin plunged close to $3,000 after a monster rally that took it above $19,000 a year earlier.

“I felt compelled to buy it — I really did,” El-Erian said in an interview with CNBC’s Dan Murphy on Monday. “I felt like I had framed it. I had this level, I had an entry point.”
He subsequently held on to his position until late 2020, when bitcoin regained the $19,000 level. A few months later, bitcoin extended its wild run, hitting a record high above $60,000.
Bitcoin continues to trade above the $60,000 mark. The cryptocurrency hit a new all-time high of more than $68,000 last week. It was last trading at about $60,718, down 5% in the last 24 hours, according to Coin Metrics data.
Analysts have pointed to inflation fears and the launch of the first U.S. bitcoin-related exchange-traded fund as key factors driving the rally. Meanwhile, bitcoin’s underlying blockchain underwent a major upgrade over the weekend.
Still, bitcoin and its smaller competitors — which include ethereum and XRP — are notoriously volatile assets. Bitcoin at one point halved in price after initially topping $60,000 as Chinese regulators stepped up a crackdown on crypto mining and trading.

“You really don’t want to ask me about valuations, because I don’t quite understand why $60,000, as opposed to $68,000, is the right level,” El-Erian added.

When to buy again

El-Erian categorizes bitcoin investors into three buckets: “fundamentalists” who are in it for the long haul, professional investors looking to diversify their portfolios and day trading “speculators.”
The economist said he would only feel comfortable buying again once some of the speculators in the market are “shaken out.” The first two types of investors, he says, are “really strong foundations for that market long term.”

Mohamed El-Erian
Olivia Michael | CNBC

“These other two levels are pretty solid in terms of supporting bitcoin and other cryptocurrencies,” El-Erian said. “The key thing here is the underlying technology and the model. And those two things are going to be very influential in the period ahead.”
Like bitcoin’s evangelists, El-Erian believes the cryptocurrency is a “very disruptive force.” But he doesn’t think it will ever become a “global currency” rivaling the U.S. dollar.
“I think it will always exist in the ecosystem but it’s not going to be a global currency,” he said. “It’s not going to replace the dollar.”
Unlike crypto skeptics, however, the former Pimco CEO doesn’t believe bitcoin can be “regulated out of existence.”

If the West is not careful, China will define standards for the world.

Mohamed El-Erian
Chief Economic Advisor, Allianz

As more and more mainstream investors jump into the market, El-Erian thinks the crypto industry should start engaging with regulators sooner rather than later to avoid the regulatory headwinds facing internet giants like Amazon, Google and Meta., the company formerly known as Facebook.
“When I speak to people in the crypto industry, I say you have a responsibility not to repeat the mistake of Big Tech,” El-Erian said. “The big mistake of Big Tech was they didn’t realize they were becoming systemically important, so they didn’t engage in preemptive regulatory discussions.”
“Crypto needs to take seriously that there are concerns about illicit payments; there’s concerns about fraud; there’s concerns about stability of platform,” he added.
El-Erian warned China may look to get ahead of the U.S. and other countries in the West on digital currency and blockchain technology.
While the world’s second-largest economy has largely banned cryptocurrency-related activities, it has ambitious plans to issue its own central bank digital currency and to apply the blockchain technology that underpins many cryptocurrencies in other fields, such as intellectual property.
“If the West is not careful, China will define standards for the world,” El-Erian said. More

Take a look at some of the biggest movers in the premarket:
Rackspace Technology (RXT) – Rackspace beat estimates by a penny a share, with quarterly earnings of 25 cents per share. The cloud computing company’s revenue also topped Wall Street forecasts. It was Rackspace’s eighth consecutive quarter of revenue growth, and the company said it was well-positioned in a booming market. its shares surged 8.3% in the premarket.

Axon Enterprise (AXON) – Axon soared 23.5 % in premarket trading, after the maker of Tasers, body cameras and other public safety equipment reported much-better-than-expected sales and revenue for its latest quarter.
Royalty Pharma (RPRX) – Royalty Pharma rallied 7.8% in premarket trading, following news that Berkshire Hathaway (BRK.B) took a new $475 million stake in the drug royalty purchaser.
Home Depot (HD) – The home improvement retailer reported third-quarter profit of $3.92 per share, 52 cents a share above estimates. Revenue also beat Street forecasts. Comparable-store sales were up a better-than-expected 6.1%, driven by demand for household tools and building materials. The stock rose 1.1% in the premarket.
Walmart (WMT) – Walmart jumped 2% in premarket trading after beating on the top and bottom lines, and raising its full-year forecast. Walmart earned $1.45 per share for the third quarter, 5 cents a share above estimates, with comparable-store sales topping forecasts as well.
Advance Auto Parts (AAP) – Advance Auto earned $3.21 per share for its latest quarter, beating the $2.87 a share consensus estimate. The auto parts retailer beat on revenue and other key metrics. Advance Auto said it was seeing higher-than-expected inflation headwinds, however, and the stock fell 2% in premarket action.

Diageo (DEO) – Diageo rose 2.4% in premarket trading after it issued stronger-than-expected profit and sales guidance for 2023 through 2025, reversing the spirits maker’s prior stance of abandoning specific numerical guidance.
Tesla (TSLA) – Tesla CEO Elon Musk sold $930 million in shares to meet tax obligations after exercising options to buy 2.1 million shares. Separately, JPMorgan Chase (JPM) is suing Tesla, accusing it of breaching a contract related to stock warrants.
Autoliv (ALV) – Autoliv rallied 4.4% in the premarket, following the announcement of a new stock repurchase program of up to $1.5 billion. The maker of automotive safety systems also updated its growth target, expecting 4% to 6% growth per year in 2024 and beyond.
Lucid (LCID) – Lucid surged 5.8% in premarket action after the electric vehicle maker reported more than 17,000 reservations for its “Air” sedan, up from 13,000 in the prior quarter. Lucid also confirmed its 2022 production targets.
Workday (WDAY) – The human resources software company added 2.4% in the premarket after UBS upgraded the stock to “buy” from “neutral,” on indications of stronger HR systems spending.

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Wall Street is set to see the highest bonuses since the Great Recession after a busy and profitable 2021, according to a pay consultancy report.
Overall bonuses for investment banking underwriters are forecast to jump 30% to 35% from the year prior, while investment banking advisors and equities traders can expect a 20% to 25% year-over-year bonus increase.
A sharp rebound in business activity this year has translated to unprecedented workloads for Wall Street professionals — and a competitive job market as companies fight to retain top talent and nab new hires.

The Wall St. sign is seen near the New York Stock Exchange (NYSE) in New York City, May 4, 2021.
Brendan McDermid | Reuters

Wall Street is set to see the highest bonuses since the Great Recession after a busy and profitable 2021, according to a report from pay consultancy Johnson Associates.
Booming deal activity, a hot IPO market and climbing equities mean bankers and traders are in line for outsized performance-based compensation, the report released Tuesday said.

But the sharp rebound in business activity this year has translated to unprecedented workloads for Wall Street professionals — and a competitive job market as companies prepare to shell out a premium to retain top talent and nab new hires.
Firms are “very concerned about turnover, even though pay is going to be up significantly,” Johnson Associates managing director Alan Johnson told CNBC.
Johnson Associates used public data from banks and asset management firms, along with proprietary insights from clients, to calculate the projected year-end incentives on a headcount-adjusted basis. Some investment banks, including Goldman Sachs, disclose how much management has set aside for employee compensation in quarterly earnings reports.
Overall bonuses for investment banking underwriters are forecast to jump 30% to 35% from the year prior. For investment banking advisors and equities traders, that year-over-year jump is estimated at 20% to 25%. Johnson Associates also predicts bonuses for private equity, asset management and hedge fund roles will see double-digit increases.

Projected 2021 bonuses on Wall Street

Business Area
Projected Percent Change from 2020

Investment Banking (Underwriting)
30% to 35%

Sales & Trading (Equities)
20% to 25%

Investment Banking (Advisory)
20% to 25%

Private Equity (Mega)
15% to 20%

Private Equity (Mid/Large)
12% to 18%

Firm Management
12% to 18%

Asset Management
12% to 18%

Hedge Funds
10% to 15%

High Net Worth
10% to 15%

Staff Positions
10%

Retail & Commercial Banking
5%

Sales & Trading (Fixed Income)
Minus 5% to flat

(Source: Johnson Associates)

The estimated record bonuses, which include cash and equity awards, come after a pandemic-ridden 2020 saw activity slow and year-end incentives decline for many bankers, although traders benefited from strong trading volumes fueled by the Federal Reserve’s steps to calm markets.
In contrast, “the business results this year have been outstanding,” Johnson said.
Business activity is expected to remain strong and keep incentives elevated next year, though growth will likely slow, according to Johnson.
“I don’t think [bonuses] are going to go up as much next year. … I think this was a spurt,” he said. “But the view is ’22 will be a really good year.”
Not only are bonuses on the rise, but base salaries are set to climb, too. While Wall Street has long preferred to compensate its workers with performance-based year-end bonuses, the competitive market labor landscape and inflation are pushing base pay higher.
After heightened attention on junior banker culture this year, firms across the Street hiked pay floors with Goldman Sachs raising salaries for their entry-level investment banking roles from $85,000 to $110,000.
Base salaries across the financial services industry could rise well over 3%, and even upward of 7%, according to Johnson.
“Base salaries are more important than ever,” he said.
—CNBC’s Hugh Son contributed to this report.

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