Amazon.com Inc.’s board on Wednesday approved a 20-for-1 stock split and authorized the e-commerce giant to repurchase up to $10 billion of the company’s common stock.

An Amazon spokeswoman said the split will make the split-adjusted share price more accessible for potential investors and will allow employees more flexibility in how they manage stock-based compensation.

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Amazon. com Inc.’s board on Wednesday approved a 20-for-1 stock split and authorized the e-commerce giant to repurchase up to $10 billion of the company’s common stock.

An Amazon spokeswoman said the split will make the split-adjusted share price more accessible for potential investors and will allow employees more flexibility in how they manage stock-based compensation.

The stock split and authorized share increase are subject to shareholder approval at its annual shareholder meeting, which is scheduled for May 25.

Shares of Amazon rose 6.5% in after-hours trading following the news. The stock closed Wednesday at $2,785.58, up 2.4%. Through Wednesday’s close, shares are down 9% over the past 12 months.

The company’s shares have lagged behind those of other technology companies in recent months as a pandemic-induced surge in online shopping slowed and Amazon has faced greater competition in its cloud-computing business. Still, the company’s profits nearly doubled last year due to significant gains from its investment in an electric vehicle maker.

Also See: What Is a Stock Split and How Can It Affect Your Portfolio?

Amazon and other technology companies have adjusted their compensation practices as they seek to retain top employees in high-demand fields, such as software engineering and other corporate jobs.

The company in February more than doubled the maximum base salary it pays to corporate workers, raising the amount to $350,000 a year from $160,000 previously.

“This past year has seen a particularly competitive labor market, and in doing a thorough analysis of various options, weighing the economics of our business and the need to remain competitive for attracting and retaining top talent, we decided to make meaningfully bigger increases to our compensation levels,” the company said in a memo sent to workers last month.

Amazon has previously split its stock several times, though it hasn’t done so since 1999, a year in which the company had net sales of $1.6 billion. Last year, the company had net sales of $469 billion and a market value more than 100 times higher than in early 1999.

Amazon shareholders of record as of May 27 will have 19 additional shares for every one share in June. Trading is expected to begin on a split-adjusted basis on June 6.

Stock splits help entice investors who might be put off by a high share price.

The practice has made a small comeback throughout the Covid-19 pandemic as Apple Inc. , Tesla Inc. and Google parent Alphabet Inc. have revived it in an effort to make their shares more affordable for individual investors. Many of those companies saw large gains in their share prices during the Covid-19 pandemic as much of the world turned to technology to manage lockdowns and work-from-home or entertainment needs.

Alphabet in February enacted a 20-for-1 stock split. Alphabet shareholders as of July 1 will receive 19 additional shares on July 15 for every share they hold. Trading will begin on a split-adjusted basis on July 18. Apple also enacted a 4-for-1 stock split in 2020.

Amazon’s newly approved repurchase authorization replaces the previous $5 billion stock repurchase authorization approved in 2016. It had bought back $2.12 billion worth of shares under that authorization. The company didn’t buy back any stock in 2019, 2020 or 2021, but repurchased 500,000 shares for $1.3 billion between Jan. 1 and Feb. 2, 2022, according to its annual securities filing. Amazon doesn’t pay a dividend.

Write to Denny Jacob at denny.jacob@wsj.com