It's an end of an era. It's also a clever move. Options aren't much of a benifit if the stock isn't growing and won't keep current employees or attract new employees. A stock award means a more predictable payout but still keeps interests aligned with corporate success. It will help with hiring. It also means better accounting and transparency of the financial statements which will please the bean counters given all the pressure to expense stock options. Less stock dilution is also good news. Unfortunately, this will also reduce the income numbers going forward and it will probably be a bit of a shock when they restate all past income numbers to include stock option expensing. Might cause a stock price wobble but the fundamentals are intact.
It's great to see that those employee's with underwater stock options might actually get some value from them. I hear it requires SEC approval first before they can implement it. Unfortunately, it looks like I left Microsoft just a little to early. Oh well.