Compaq Chairman Benjamin Rosen announced Thursday that he was retiring after 18 years with the PC maker.
Chief executive Michael Capellas will now serve as the company's chairman.
Compaq shares closed up $1.65 to $30.80 Thursday.
"Michael's appointment is a natural and appropriate step for Compaq at this moment in our history," Rosen said in a prepared release. "After almost two decades as chairman of the board, I have complete confidence in Michael to lead Compaq during the next great phase of the company's growth and global expansion."
Rosen was a founding member in 1982 and appointed chairman in 1983.
In its latest quarter, Compaq met analysts' estimates, earning $387m, or 21 cents a share, on sales of $10.1bn.
First Call consensus expects it to earn 29 cents a share in its third quarter and $1.08 a share in the fiscal year.
Its shares moved up to a 52-week high of $35 in August after bottoming out at $18.25 in October.
Twenty-three of the 28 analysts following the stock rate it either a "buy" or "strong buy".
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