The Buzz: July 14, 2003

Microsoft to Dump Stock Options

Microsoft to Dump Stock Options

Microsoft will end its long-standing practice of compensating employees with stock options, starting this September, officials announced last week.

A new Stock Award program will let staff earn actual shares of Microsoft stock, rather than being awarded options that give them the right to purchase stock at a set price, officials said. Stock options helped make thousands of Microsoft employees millionaires and were considered a key strategy to attract and retain talent in Silicon Valley. But several accounting scandals and options abuse have pressured leading corporations to eliminate the practice.

A large portion of stock-based compensation for more than 600 of Microsofts senior leaders will soon depend on growth in the number and satisfaction of Microsoft customers, CEO Steve Ballmer said.

Ballmer said these moves will help the company attract and retain "the best employees and better align their interests with those of our shareholders. These changes are a key step in our ongoing effort to position Microsoft for long-term success."

Microsoft Takes Heat on Compliance

Massachusetts, the sole state refusing to sign a Microsoft antitrust settlement, is investigating whether the software maker has violated the deal by punishing a computer manufacturer for promoting a rival operating system, Linux. The allegation, with others, is based on complaints and tips and has not been proved, the Bay State told the U.S. District Court for the District of Columbia.

Microsoft denies it is violating the settlement. "Microsoft is complying fully with all aspects of the courts final judgment," said spokesman Jim Desler. "As for the Massachusetts filing, it is important to remember that there are multiple layers of legitimate enforcement and oversight into Microsofts compliance."

Massachusetts is setting up a Web site and telephone hot line to gather complaints about Microsofts conduct.

Meanwhile, the states that signed the settlement, with the Department of Justice, asserted that Microsoft isnt fully living up to its obligations, and they warned that the court might need to issue an order to ensure full compliance.

Brazilian Crew Wins Defacement Contest

A well-known Brazilian crew won this months Web site defacement contest, amassing more than twice as many points as the second-place team.

Crackers from the team racked up 152 points in winning the contest, which put them 90 points ahead of the runners-up, the Hackbsd Crew. For their efforts, the Brazilians won a Web hosting package.

The contest challenged crackers to deface as many Web sites as possible within a given amount of time. Points were awarded based on the operating system of the box that was hosting the defaced site. The less common the operating system, the more points the defacement was worth. For example, sites running on Windows machines were worth just one point, while sites on Macintosh systems were awarded five points. The contest, which had been widely publicized in the days leading up to the July 6 kickoff, drew more than 60 entrants, reports the organizers Web site. Only about a quarter of the entrants scored 10 points or more.

McDonalds Expands Restaurant WLAN Plan

McDonalds, which has been offering wireless Internet access at 10 restaurants in New York, expanded the pilot program to 55 outlets in the San Francisco Bay area.

More restaurants in New York and Chicago are set to become wireless hot spots as part of the companys goal to offer wireless service at several hundred restaurants by years end.