Shares of Life Insurance Corporation of India (LIC) traded in negative territory, declining by over 2 percent, following the announcement of plans to increase wages by approximately 17 percent for its workforce of over 110,000 employees.
LIC revealed on March 15 that it had obtained government approval for a wage revision, effective from August 1, 2022. This decision impacts employees across the organization, with estimated annual implications of around Rs 4,000 crore, potentially inflating the annual wage bill to over Rs 29,000 crore.
Additionally, arrears totaling approximately Rs 7,000 crore for the current fiscal year must be factored into the total wage bill, bringing the total wages for FY24 to Rs 32,000 crore. Furthermore, the contribution to the National Pension System (NPS) has been increased from 10 percent to 14 percent for nearly 24,000 employees who joined LIC after April 1, 2010. Moreover, a one-time ex-gratia payment has been disbursed to over 30,000 LIC pensioners and family pensioners.
Earlier reports from CNBC-TV18 indicated that over 1 lakh LIC employees could expect a 16 percent increase in their base pay from August 2022, with the total wage hike potentially reaching 22 percent when allowances are considered.
As of 12:10 pm, LIC shares were trading at Rs 909.70 on the NSE, representing a decline of 1.67 percent. The stock had previously settled lower by 3.5 percent on March 15, with a cumulative decrease of nearly 10 percent over the past five sessions.
