The UPS board of directors Thursday approved an increase in the package-delivery company’s quarterly dividend and reauthorized a share repurchase program for $10 billion.

The 8.8 percent increase in the regular quarterly dividend to 62 cents on outstanding Class A and Class B shares is payable on March 12, 2013 to shareholders of record on Feb. 25, 2013.

Chairman and Chief Executive Officer Scott Davis said the generation of almost $5.4 billion in free cash flow made it possible to increase payouts to shareholders, in addition to reinvest in the company’s growth.

“This dividend increase reflects the power of the UPS business model to deliver consistent returns to shareowners,” Davis said in a statement.

UPS said the new share repurchase authorization replaces one approved in 2012. In January, UPS announced an increase in its 2013 stock buyback plans to $4 billion from $1.5 billion. The $10 billion authorization has no expiration date.

After releasing the company’s fourth-quarter results last month, Davis forecast a “relatively flat” first quarter for the world’s biggest package-delivery company. Davis blamed “a slow-growth economy,” according to an Associated Press report on its earnings. Profit in the last three months of 2012 fell short of Wall Street expectations.

Thursday on Wall Street, UPS’ shares closed up 19 cents at $82.69. Its 52-week low is $69.56 and high for the period is $83.08.

The company’s board also announced John Thompson, who has served as a director since 2000, is stepping down after his term ends in May. Thompson, the second-longest-serving UPS director, is CEO of Virtual Instruments Corp. and former chairman and CEO of Symantec.

“His insights were invaluable and his contribution can’t be underestimated,” Davis said of Thompson.