Investor wrath over the lucrative CEO stock options grants that were a hallmark of bubble-era excess found a high-profile answer Wednesday.

Cendant ( CD), the real estate and travel conglomerate, said it would get rid of its annual option package for CEO Henry Silverman.

As a result of the decision, Silverman's pay will be cut by more than half to $15 million in 2002 from $36 million in 2001. Instead of options, the CEO will get an incentive bonus tied to company earnings.

Cendant also said it would expense stock option grants for the rest of its employees. The announcement follows similar moves at GE ( GE) and Coca-Cola ( KO).

Moreover, Cendant plans to reduce its reliance on employee stock option grants, utilizing restricted stock grants in their place. The plan comes as boards of directors, on the run from corporate scandal, are cracking down on compensation excesses. Many expected Cendant's announcement to set a precedent for other firms.

"Companies are going to place less emphasis on the stock market and more emphasis on annual profitability," said Charles Peck, a compensation analyst at the Conference Board, a New York-based research firm. "I would not be surprised if Cendant's announcement is an early indication of a trend."

Even firms that are using stock options have adopted rules to prevent abuse, such as pump-and-dump schemes that enriched CEOs in the '90s just before their stocks became cheap. At GE, for example, employees must keep their money in company stock for a year after exercising an option.

In recent years, Henry Silverman has been among CEOs who have been criticized for their compensation packages. His name has often appeared in stories about overpaid executives. In 2001, Silverman got a $4.7 million bonus, while his firm had $6.1 billion in debt and earnings fell 40%, according to Forbes.

Also, because it was involved in an accounting scandal revolving around the 1997 merger of HFS and CUC International, which created the company, investors have had all the more reason to be suspicious.

"Cendant has been under the microscope for years," said Pat McGurn, vice president of Institutional Shareholder Services, a proxy advisory firm. "Its pay policies are going to be scrutinized quite heavily."

Silverman, one of Cendant's largest shareholders, will not get restricted stock in 2002. He currently owns 8 million shares of Cendant and has options to purchase an additional 36.4 million shares, granted between 1993 and 2001, at an average price of $13. The stock is now trading at about $14.60.