Of course, optionsmarketparticipantsarealready wise to this, and option premiums are highenough todetermanyinvestors from making useof plain-vanillavolatilityswaps.
Switching from plainvanilla to indexed stock options, in particular, focuses top executives on making their company outperform competitors and the market as a whole, which would better serve to align executive and shareholder interests.
Most options were plainvanilla, with an exercise price equal to fair market value on the date of grant, ten-year terms and a three- to four-year vesting period.