Hewlett-Packard Co., the world's No. 2 computer maker and largest maker of computer printers, on Friday said its board authorized an additional $1 billion toward the repurchase of its shares.
The Palo Alto, California-based company said it will use the new authorization to continue its normal share buybacks, which are primarily intended to offset dilution from issuing stock options to employees as part of their compensation.
Share buyback programs are popular among technology companies because a considerable portion of employees' compensation is in option grants.
A stock option is the right, but not the obligation, to purchase shares in a company at a future date at a set price, known as the strike price.
Ideally, the strike price is less than the current market value of the stock at the time the option can be exercised, allowing the employee to make a profit.