By Robin Chan

SHIPPING giant Neptune Orient Lines (NOL) will pay its chief executive and directors less as part of a move to more than double the firm's cost-savings.

NOL is anticipating net losses for the full year and yesterday chief executive Ron Widdows told shareholders at the firm's annual general meeting that new initiatives could deliver cost-savings of as much as US$550 million (S$826 million) this year - up from the US$250 million initially revealed in its full-year review in February.

As part of this move, Mr Widdows voluntarily agreed to take a 20 per cent pay cut with effect from last month, while the board of directors will also see their fees reduced this year by 20 per cent.

The company paid out US$1.4 million in non-executive directors' fees last year, according to its annual report for the year ended December 2008. NOL chairman Cheng Wai Keung was awarded US$165,887 in fees last year and will take a 40 per cent reduction.

Mr Widdows received between US$1.6million and US$1.75 million in compensation. This comprised 30 per cent salary, 11 per cent cash bonuses and the remainder in equity incentives and benefits.

Mr Cheng, who is also chairman of property group Wing Tai Holdings, said: 'We see a difficult period ahead. Our focus will be on riding out the storm and positioning the company for growth when conditions improve.'

The company - the world's seventh-largest container line - has put in place a slew of cost-reduction measures as the global slowdown in trade and an oversupply of new vessels put a strain on its bottom line.

NOL reported an 84 per cent plunge in full-year net profit last year to US$83.1 million after posting a fourth-quarter net loss of US$149 million. And Mr Widdows said that the company expects to report a loss for the full year this year.

Late last year it announced that it would cut 1,000 jobs - 9 per cent of its workforce - including about 50 staff here, and move its headquarters from Oakland, California to Phoenix, Arizona.

It has also joined other shipping lines in laying up vessels, with 15 made idle since December out of its total of 139.

As of April 13, the global idle fleet stood at 486 ships, representing 10.4 per cent of the world's capacity, according to Paris-based container shipping consultant AXS Alphaliner.

NOL shares closed four cents or 2.6 per cent lower at $1.51 yesterday.

This article was first published in The Straits Times.