AOL said it will buy back $600 million of stock and announced a cash dividend of $5.15 per share.
The buyback plan utilizes a share repurchase authorization approved previously and an incremental $10 million plan authorized on Aug. 26, the company said.
AOL has 93.9 million shares outstanding, according to Thomson Reuters data.
The stock was up about 5 percent in pre-market trading on Monday. It had closed at $32.92 on the New York Stock Exchange on Friday.