Although it does seem a bizarre move, there's no way on earth they won't have covered the compensation side, likely it has a fixed fee for sacking.
I don't really get the need for it, in truth.
Yes, Pardew has done a very decent job at the club, but I don't think for a second that he'll ever be courted by a bigger club than Newcastle, this is not a dig at the man, more the fact that there aren't many bigger clubs than Newcastle around, and the few that are would be looking for higher profile managers, with proven European pedigree & trophies in the cabinet.
I guess it more of a front to show a stable club, with faith in it's staff, and to be fair, that's a smart enough step given the uncertainty around a lot of clubs at present.
For me though, it just achieves little, means little, and seems a bit pointless, bordering on daft.