Investing.com -- The board of directors of American Express Company (NYSE:AXP) approved a repurchase plan of up to 150 million common shares on Tuesday, while announcing a 12% dividend increase on the company's common stock.
American Express' authorization replaces a previous 150 million share repurchase program, which had roughly 45 million shares of the company's common stock under authorization. The repurchasing agreement still remains subjected to the Federal Reserve's non-objection of the company's capital plans.
In a separate decision, the board approved a $0.03 or 12% increase in the company's quarterly dividend on its common stock. The board increased the dividend to 0.29 from a previous level of 0.26, which will be payable to shareholders on August 10. The dividend will be available to shareholders of record on July 2.
American Express shares have been down in recent months after the company announced the termination of a 16-year relationship with Costco (NASDAQ:COST) in mid-February. The company's exclusive relationship with the nation's second-largest retailer is set to expire on March 31, 2016. A new deal with Costco and Visa is scheduled to begin the following day.
In mid-March, American Express was informed that the Fed did not object to the company's 2015 capital plan to repurchase up to $6.6 billion of common stock through the second quarter of next year, the company said in a statement. In addition, the Federal Reserve did not object to the company's plan to increase its quarterly dividend to 0.29 per share.
Shares in American Express gained 0.94 points or 1.19% to 80.02 in after-hours trading. American Express shares hovered around $85 a share before the split with Costco.