Carly Fiorina becomes chairwoman of the computer company, a vote of confidence after her first year as president and chief executive officer.
At the same time, the board of directors also authorized a $1 billion stock buyback program. Shares will be purchased in the open market and in private transactions, the company said.
As chairman, Fiorina will succeed Rickard Hackborn, a former HP executive who will remain on the board of directors.
"This wasn't precipitated by any specific event. It's a recognition of her leadership and an endorsement of her strategy for the company," said Dave Berman, an HP spokesman.
HP shares were up $5.25, or about 5 percent, to $100.25 in morning trading, even as the Nasdaq slumped more than 100 points. The tech-heavy index was seen falling amid concerns that Intel's warning yesterday of slow sales in Europe could be a harbinger of problems for the entire PC industry.
The company said it is comfortable it will meet analyst projections of 15 percent revenue growth and report earnings of $1.03 per share for the current quarter, ending Oct. 31.
"This appointment is a strong vote of confidence in Carly's leadership and the direction she has set for the company over the past 14 months," Hackborn said in a statement. "Under her stewardship, the company is now poised for accelerating growth."
Analyst Roger Kay seconded that assessment.
"She's done a great job. They've had perfect execution," said Kay, director of the PC research group at International Data Corp. "Everybody set pretty high expectations for her, and she's exceeded those expectations."
Fiorina is known as a high-energy motivator who has invigorated the rank and file at HP, Kay said. "She's well liked, she's respected. People say she's re-energized the organization," he said.
Kay does not believe HP will be affected by Intel's European woes, despite its ties to Europe through its commercial PC division, which is headquartered in Grenoble, France.
"This is a typical pattern in Europe," he said, explaining that sales are usually slow in Europe during the third quarter because so many Europeans go on holiday in August. "It's always a blow-out fourth quarter."
Fiorina was named president of HP last July, replacing Lew Platt. Fiorina, who most recently was president of Lucent Technologies' global service provider business, has focused primarily on making the PC maker a player in the growing Internet infrastructure and consulting market.
On Sept. 12, the company announced Superdome, a new Unix server line designed for Internet-focused jobs, including powering e-commerce sites. Sources say the computers are priced starting at $1 million.
Earlier this month, the company confirmed it was in talks to buy consulting firm PricewaterhouseCoopers for $18 billion in a bid to beef up its consulting team.