You want to stir up a hornet's nest? Put firebrand Senator Elizabeth Warren on your show to discuss her proposal to federally mandate that companies tilt corporate rewards more toward the under-compensated stakeholders and less toward the passive, largely wealthy shareholders and their upper-end minions in the corporate board room.
Now I know that Warren's populist proposals don't have that much chance of passing -- and some could argue that it's just socialism in disguise, so she should be easily dismissed.
I think that's nonsense. Her ideas are both thought-provoking and, at some visceral level, known to have gravitas. Who hasn't said that CEO pay has gotten out of control versus what workers make? Who hasn't lamented that as recently as thirty years ago, the gap between CEO rewards through stock options and employees compensation was much more narrow, and it would be good if that distribution weren't more tilted toward those who help generate the real return that's then hived off to those who do nothing but rent the enterprise in the stock market.
But I come at it from a totally different path. While I don't agree that federal charters are necessarily the way to go, I do think that there's an intersection between core tenets of Mad Money and the doctrine according to Warren.
You see, I am always on the lookout for companies with CEOs that make a point of the need to share the wealth more, who emphasize that those who work at the company need to be treated better, be more empowered and have their pay be more in line with the rewards the CEOs and the stockholders get.
That's because I have been schooled by three tremendous CEOs about the need to offer higher wages, more benefits and a clearer alignment with the success of the institutions, three CEOs who have generated incredible returns for those who invest in their enterprises because, as I mentioned to Senator Warren, the two do go hand in hand.
Who are the three most visionary CEOs who are more aligned with Warren that you might think? How about Marc Benioff's Salesforce.com (CRM) , with a stock that has launched from $16 to $145 these last 10 years. How about Jim Sinegal's Costco (COST) , which had gone from $58 to $221 in that same period? How about the stock of Domino's Pizza (DPZ) , which has rallied from $12 to $284 under Patty Doyle's tutelage and teachings.
Now only Marc is still with the current enterprise, but I think that we would all be slighting Sinegal and Doyle if we didn't hail them as creating a workers-share-the-wealth ethos, even as they have retired. Oh, and to drive home the point of my gulf with Senator Warren, both Doyle and Sinegal paid out large special dividends, too.
Benioff has always been front and center talking about the need to reward stakeholders. I'd say he's been the most vociferous about it, more than any other CEO in the country. Sinegal explained to me that one of the bigger differentials between Costco and all other retailers is that it paid workers more, gave them more benefits and therefore had far less turnover.
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How important is that? Remember training a new employee is both expensive and, when it comes to the customer, perilous. The customers want to see the same solid people in the store, not endless neophytes not familiar with the ways or even the layout of the store. Domino's? When I asked Patty what his greatest legacy would be, I thought he would say the digitization of his chain. Nope. He was most proud that 90% of the franchises are owned by former drivers, pizza markers or hourly workers. I'm sure that's music to Senator Warren's ears, but it should also be music to your ears, as that may be the difference maker -- besides a technological base, as at times Domino's does seem as much like a tech company that delivers pizza---in what has always been an undifferentiated industry.
So scoff at Warren all you want. She's on to something. She's on, ironically, to how to find the best returns in the market.