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Cramer: Don’t dismiss Sen. Elizabeth Warren’s ideas as bad for companies

Key Points
  • CNBC's Jim Cramer thinks that investors shouldn't be too quick to write off Senator Elizabeth Warren's ideas as bad for business.
  • "Look for the companies that take care of their employees and you'll find some fabulous stocks," the "Mad Money" host said.
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Shouldn't dismiss Sen. Warren’s ideas as bad for companies

While Senator Elizabeth Warren's economic policies are known to spark divisive reactions, CNBC's Jim Cramer thinks that investors shouldn't be too quick to write off her ideas.

On Wednesday, the Democratic Senator from Massachusetts sat down with Cramer to discuss her new bill called the Accountable Capitalism Act. The bill would require large companies to consider the interests of not just shareholders, but also employees, customers and communities where the company does business, when making decisions.

Cramer said he doesn't believe that a federal corporate charter, as proposed by Warren, is the best way to achieve the goals of the bill. However, the "Mad Money " host pointed out that "some of the best-run companies I follow have already taken a page from Senator Warren's playbook."

Cramer cited Costco, Domino's and Salesforce.com as three companies that exemplify one of the core ideas of "Mad Money" also shared by Senator Warren, that "doing well and doing good can go hand-in-hand."

Cramer recalled when former Costco CEO Jim Sinegal told him that "one of the big differences between Costco and nearly every other retailer is that Costco gives its workers better pay and more benefits." Paying workers more leads to less employee turnover, which is a boon for companies because constantly training new employees can be costly and lead to a poor customer experience.

Former Domino's CEO Patrick Doyle once told Cramer that during his 8-year tenure, he was most proud that 90 percent of franchise owners used to be hourly workers. The "Mad Money" host said that having franchise owners who are intimately familiar with the business is one of the reasons why Domino's "consistently beats the competition."

According to Cramer, Salesforce CEO Marc Benioff has spoken of "the need to reward stakeholders, not just shareholders" more than any other CEO in the country.

While these three companies have policies that would be "music to Senator Warren's ears," their bottom lines haven't suffered as a result. On the contrary, Costco shares are up 20 percent this year, while Salesforce and Dominos posted even bigger gains – 42 and 52 percent, respectively.

In Cramer's view, Senator Warren might have a winning formula for choosing high-performing stocks. "Look for the companies that take care of their employees and you'll find some fabulous stocks," he concluded.

WATCH: Cramer discusses three CEOs who follow Sen. Warren's philosophy

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Cramer: Don’t dismiss Sen. Elizabeth Warren’s ideas as bad for companies

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