UPDATE 2-HP shareholders back say on pay

* Nonbinding vote on compensation will start in 2011

* CEO asked about dividend, PDA market

(Adds additional details from meeting)

NEW YORK, March 17 (Reuters) - Hewlett-Packard Co's (HPQ.N) shareholders have approved a proposal that gives them a voice in executive compensation.

The so-called "say on pay" advisory vote, which will be nonbinding, is set to begin at the 2011 meeting of shareholders.

HP, is the world's largest technology company by revenue and ranks first or second in a number of key segments, including personal computers, IT services and printers.

At its annual meeting in Mountain View, California, on Wednesday, HP Chief Executive Mark Hurd also faced questions about the company's plans for its products and its capital.

In response to a question about the company's 8 cent quarterly dividend, which has not been raised in more than a decade, Hurd noted most technology companies do not pay a dividend and said HP considers a range of uses for its cash.

HP, with close to $14 billion in cash and investments, has used cash to buy back stock, Hurd noted. But he said he did not believe a stock split necessarily created shareholder value.

Hurd was also asked about HP's plans in the smartphone and PDA space, where many PC makers are now competing aggressively. HP's iPaq handheld device is not a big seller.

"We are interested in the market, but we've not done as well there as we have in the rest of the product line," Hurd said.

"A bigger issue for us isn't just the device, the bigger issue is the capability from a services perspective," he added.

Hurd described services as those that allow access to features from the Internet, such as photos.

Under Hurd, HP has pursued multibillion-dollar acquisitions and taken on new challengers as the tech sector consolidates into a smaller number of large players.

HP agreed last year to buy network equipment maker 3Com Corp COMS.O for $3.1 billion as it looks to better compete with Cisco Systems Inc. [ID:nN11380084]

Last month, HP posted better-than-expected results and the company raised its full-year outlook. [ID:nN17147929]

The shares of Palo Alto, California-based HP closed 12 cents lower at $52.23 on the New York Stock Exchange. (Reporting by Gabriel Madway; editing by Tim Dobbyn and Andre Grenon)