Exxon Mobil Corp (XOM.N) raised its quarterly dividend 21 percent on Wednesday, bowing to sustained pressure from investors and Wall Street analysts.
The world's largest publicly traded oil company raised its quarterly payout to 57 cents from 47 cents.
The dividend will be payable on June 11 to shareholders of record as of May 14.
Exxon shares rose 0.4 percent to $86.64 after the announcement. The stock has traded between $67.03 and $88.03 in the past 52 weeks.
The company, which had $12.66 billion in cash at the end of last year, was under pressure from Wall Street and shareholders to match the payout of smaller peer Chevron Corp (CVX.N).
The 21 percent rise was larger than the 10 percent to 15 percent many analysts expected.
Exxon, based in Irving, Texas, has historically favored share buybacks over dividend increases as a way to increase returns, spending $20 billion on share repurchases last year and $9 billion on dividends.
Chief Executive Rex Tillerson told analysts at the New York Stock Exchange last month that Exxon would seriously evaluate raising its dividend after it completed buying back shares issued for its $41 billion all-stock purchase of XTO Energy Inc in 2010.
The XTO stock repurchase was expected to be completed by the end of the first quarter, according to a transcript of the meeting.
"We are mindful of our competitiveness in the dividend area," Tillerson said at the NYSE. "We know we are on the low end of yield, certainly within our sector."
(Reporting By Ernest Scheyder in New York; additional reporting by Anna Driver in Houston; editing by Gerald E. McCormick and Andre Grenon)