Microsoft's top 900 leaders got almost $317 million in company stock Thursday, the first installment in a compensation plan meant to reward them for the company's performance during the past three years.

The awards are going to the most senior 1.3 percent of the company, who will share in 37 million shares in the coming three years.

The Microsoft board awarded the stock based on the executives' success in meeting or exceeding most of the performance measurements used to determine the awards.

The program is designed to focus leaders on the company's long-term growth.

Participants in the Shared Performance Stock Award program, not including Chairman Bill Gates and Chief Executive Steve Ballmer, were rewarded based on growth in customer satisfaction and use of the company's products, according to a Microsoft regulatory filing.

The filing does not say whether the company's stock price is a performance factor. During the three years ended June 30 — the period covered by the awards — Microsoft's shares sank about 10 percent.

"This raises a question: Should we be compensating the top officers of a public company for not moving the stock price? For all the controversy over stock options, the fact is it's still their job to create value," said Fred Whittlesey, a principal at Compensation Venture Group, a Seattle consultancy.

In 2003, Microsoft became one of the first big companies to abandon stock options in favor of restricted stock and performance-based awards.

Options give employees the right to purchase stock at a strike price set on the day they are granted. If the stock increases, employees can gain from the difference between the strike price and the stock's value when they go to sell it, typically after a vesting period.

Restricted stock grants and performance awards compensate employees regardless of how the stock performs.

Options minted thousands of Microsoft millionaires in the 1990s but today involve more accounting baggage.

As of last year, companies are required to expense stock options, often chewing away profits. A growing scandal over stock-option backdating is causing companies even more trouble.

With Microsoft's languishing share price, stock options also offered employees little of the benefit they once did.

"Stock options only work if the share price is rising fairly consistently and fairly rapidly," said Matt Rosoff, an analyst with Directions on Microsoft in Kirkland.

The company "didn't want to tie executive compensation too closely to share price," he added.

Loosening that tie has ramifications for employee retention and for sending a signal Microsoft's leaders are "not worried about making these sort of short-terms bumps in the stock price at the expense of long-term strategic moves," Rosoff said.

Whittlesey said the market has not picked up that signal, judging by the share price.

Microsoft's early experience moving away from stock options will be a factor in the ongoing debate on the practice, Whittlesey said.

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com