Jim Cramer sees old Wall Street rhetoric in battle for value brands amid Starbucks management shakeup: 'Keep it on your sheets' – Starbucks (NASDAQ:SBUX), Chipotle Mexican Grill (NYSE:CMG)

Jim Cramer shared his thoughts on the recent Starbucks Corp. SBUX CEO change and its impact on traditional investment strategies.

What happened: Cramer, the host of CNBC's “Mad Money,” spoke about the recent change in Starbucks leadership. He noted that the CEO change from Laxman Narasimhan To Brian Niccolthe former CEO of Chipotle Mexican Grill CMGwas a key factor in the company's recent share price increase.

Cramer wrote, “One hates it when a shibboleth that is supposed to enforce and enforce discipline actually costs one money. That is how I felt about the idea that it is a sin to give up values.”

“Since the late 1980s, I have believed that if you believe a company or its brand is valuable, you have to fight to 'keep it on the balance sheet,' which is the real Wall Street refrain for holding on to the stock,” he added.

Cramer noted that the market had lost confidence in Narasimhan and his leadership style, which he described as “advisory.” The change in leadership has renewed investors' confidence in the company's future prospects, Cramer said.

He also raised questions about the potential challenges Niccol might face, particularly given the continued influence of Howard Schultzthe company founder and major shareholder. However, Cramer expressed his confidence in Niccol's ability to steer the company in the right direction.

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Why it is important: The change in leadership at Starbucks comes at a crucial time. Billionaire and hedge fund manager Bill Ackman recently reduced its stake in Chipotle, highlighting potential challenges within the company.

Niccol's appointment has already had a significant impact on Starbucks' valuation, with the company's shares rising by around 20%, adding more than $15 billion to its value. This increase reflects investor confidence in Niccol's ability to put the company on a growth trajectory.

In addition, Niccol's compensation package is substantial and includes a $113 million payout and the ability to work from home. This package includes a $10 million welcome bonus, a $75 million stock grant, and a potential $23 million annual grant starting in fiscal year 2025.

Cramer had previously highlighted Niccol's central role in Starbucks' turnaround. On his show, Cramer stressed that Niccol is the “key to a new Starbucks,” but warned that the turnaround “can't happen overnight.” Starbucks has faced challenges in its key markets, including a decline in store sales for two consecutive quarters.

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This story was created with Benzinga Neuro and edited by Kaustubh Bagalkote