Executive Travel : Cabletron Chief Proud of His Tightwad Status

Business travelers who think their company is stingy when it comes to on-the-road expenses might want to compare their bosses with this tightwad.

Craig Benson, chairman of Cabletron Systems Inc., makes his employees travel on their own time. That means nights or weekends only.

With few exceptions, the company, which manufactures and markets computer network systems, will pay no more than $70 for a hotel room. If the employee spends more, it comes out of his or her pocket.

Direct flights are generally a no-no if a stopover can bring down the ticket price.

New Hampshire-based Cabletron has 5,000 employees. Of those, Benson said, 700 to 800 regularly hit the road for the company, traveling all over the world.

Benson said he’s proud to be considered a tightwad and that there are few complaints.

The reward for Cabletron’s employees?

“We have a number of stock option programs, and saving money as a result goes to the bottom line and helps our share price,” Benson said. “And it allows us to invest in the things they need. Most of our people are technical, and they say we’ve given them state-of-the-art equipment with which to work.”

Also, employees “get to keep all of our miles on the frequent-flier programs,” said Bob Cullinan of the company’s communications department.

Many of the firm’s employees have worked for other firms that got into trouble through bloated travel budgets, so they appreciate what the company is trying to do, Benson said.

Benson and partner Bob Levine founded the company in a garage in 1983. Benson said he sticks to the rules when he travels on company business--even though his personal fortune has been estimated at about $500 million and he’s included on the Forbes list of the 400 wealthiest Americans.

The travel policy started when the company did, and helped hold down start-up costs. “They were essentially spending their own money in the early days,” Cullinan said. There was no outside money until the firm went public in 1989. New employees came on board knowing they had to travel on their own time. “It’s always been like that,” Cullinan said.

Co-founder Levine likes to travel first-class, but he has to pay for it.

“Last year he turned back his entire $52,000 salary, plus he paid $18,000 in travel overages,” Cullinan said. When Benson and Levine travel together, Benson will sit in first class only if Levine upgrades him. Benson “is not someone with a lot of affectations,” Cullinan said.

There are some exceptions to the company’s penury. Employees can spend up to $95 for a hotel room in New York, Benson said, but the $70 limit applies “practically everywhere else.” Tokyo is another city where it’s tough to find a room within the limit, he said.

The company books airplane reservations so it can make sure its cheaper flight rules are being followed. But Benson also said a certain amount of common sense comes into play in assuring that stopover requirements don’t use up too much of an employee’s time or lead to burnout.

Benson also said that so far his company has seen little relief from the airline industry on the hurdles business travel managers complain about, such as the weekend stopovers required for lower fares.

Cabletron, based in Rochester, N.H., had net income of more than $119 million in its most recent fiscal year, and it has kept a steady 59.3% profit margin in the past year.

This week, its Ethernet hub system, which allows computer networks to talk to each other, was chosen to be the first such system in space. It will transfer data gathered in experiments aboard the Russian Mir space station, which will be launched later this year as part of a joint project with the National Aeronautics and Space Administration.