"Mad Money" host Jim Cramer chats with Costco CEO Craig Jalenik about the membership warehouse retailer's business model has translated to higher stock prices.

Charging low prices, moving large amounts of volume and paying high wages are all components in Costco’s secret sauce to return value to shareholders, CEO Craig Jelinek told CNBC in an interview that aired Tuesday.

The stock has risen almost 110 points within the past year. An Oppenheimer analyst upgraded the stock earlier that day, assessing a double-digit rise ahead.

“One of the things about low prices, you generate a lot of volume. When you generate a lot of volume, you generate cash, and you have a responsibility to your shareholders and, you know, the stock has appreciated,” Jelinek said in the “Mad Money” interview.

Costco Wholesale shares jumped 2.8% in Tuesday’s session to a new all-time high on the heels of Oppenheimer’s outlook revision, boosting the stock to “outperform” from “neutral.” The firm also upped its price target on the security to $335 from $300, citing an attractive valuation, upbeat top line trends and potential for a special dividend. Costco last offered a $3.1 billion special cash dividend, or $7 per share, in 2017.

“We’ve done special dividends in the past. We always think about when the right time might be to do a special dividend. We have no plans right at the moment, but we always — we’ll always look at that,” Jelinek said in the sit-down with Jim Cramer, which was taped Friday.

A special dividend is a one-time distribution of cash to shareholders outside of the company’s normal dividend. The extra dividend is typically higher than what the quarterly dividend offers. Costco, an international chain of membership warehouses, currently pays out a dividend of 0.83%.

In the interview, Jelinek said Costco offers “great prices” in its 785 stores worldwide while paying “good wages” because business should “never do it on the back of your people.” Of the retailer’s 163,000 employees in the United States, the average hourly pay is nearly $25, he said, adding that staff who have been around for a decade or longer are paid almost $29 an hour. Costco also offers benefits and 401(k) plans.

“You want longevity; you want good employees. They know their jobs,” he said. “They show you ways to become more efficient as a company. You’re only as good as the employees that work with you.”

Costco had 99.9 million card-carrying members as of late November. The most basic membership costs $60 per year to shop at the grocery warehouse chain. The company also has a plan targeted at small- and medium-sized businesses, which shop the store for retail and office uses. Last year, Cramer included the company in his “WATCH” list of five top retailer stocks, including Walmart, Amazon, Target and Home Depot.

The business model is built to have low overhead — doing away with salespeople, decorated buildings and delivery, among other services — that allows Costco to pass on cost savings to members.

“We need a lot of volume going through these, as we call them, warehouses. So that’s really what it’s about,” Jelinek said. “We do a lot with very few units [and] turn a lot of inventory, and it just works the best way for us to do it that way. We will continue to expand our Costcos, but we are not going to have one on every corner.”

Costco has grown more than 70% within the last decade. In the 2019 fiscal year ended August, Costco brought in $152.7 billion in revenue and $8.19 of profit per share, according to FactSet.

When the company reports its second-quarter fiscal 2020 results in March, Wall Street forecasts $2.07 of earnings per share on $38 billion in sales.

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