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Microsoft moves up option grants

Microsoft (Nasdaq: MSFT) is moving up the timing of its next stock option grant.

In a memo sent earlier this week to Microsoft employees, CEO Steve Ballmer said options formerly scheduled for an August grant date would instead be issued in February as part of the company's regular employee reviews.

"At the end of the day, we believe that the best way to generate long-term value for all of Microsoft's shareholders is to ensure that our employees are engaged, excited and rewarded for their hard work and loyalty," Ballmer's memo reads. "Your managers are already working on the February review process, and the stock component of this we're announcing today will be incorporated into those ongoing efforts."

Shares of Microsoft ended Friday at 53.5, down 1.5 for the session and 54 percent below their 52-week high.

The company has always relied heavily on stock options as an incentive for employees, but as Microsoft's stock has tumbled with the rest of the tech sector, the company has been forced to expand its efforts to retain employees.

Microsoft in April granted 70 million new options to its workforce. Last month, the company said it would raise base salaries and bonuses for its best performers, and good performers at the lower end of the pay scale.

"Stock options remain a great long-term opportunity for employees to share in the success of the company," Ballmer wrote in the December memo. "That remains important, but reality has set in -- here and industry-wide."

In the past year alone, a number of top Microsoft officials have resigned including vice president of developer marketing Tod Neilsen; chief technology officer Nathan Myhrvold; former Interactive Media Group chief Pete Higgins; Windows group vice president Paul Maritz; and vice president of Windows server marketing Jim Ewel.

Granting options early would increase the stock gains for employees if the market starts to recover in the first half of this year. "Microsoft is giving employees an additional six months of upside opportunity," a Microsoft spokesman said Friday.

Neither the exact number of options involved nor the pricing dates for the grants have been determined yet, the spokesman said.>