One week before telling investors its financial woes had reached the point of jeopardising the insurer?s future, Quanta Capital Holdings directors voted themselves a 33 percent increase in fees, a regulatory filing lodged last Wednesday shows.

Directors, who may now meet more often to address the company?s troubles, voted on February 22 to pay themselves $2,000 every time they meet, up from previously received compensation of $1,500. The company is in the ?very near term? to cut employee costs by up to $11 million, management said on Thursday.

Investors in the Nasdaq-listed Bermuda insurer saw the value of their shares fall nearly seven percent on Friday, on the heels of announcing large losses and a credit rating downgrade. The shares closed in Nasdaq composite trading on Friday at $2.69; after-hours traders pushed the value of the shares down another five cents.

The company?s stock sank 40 percent on Thursday after Quanta estimated between $40 million and $45 million in fourth quarter losses. The insurer?s stock has fallen nearly 80 percent in value compared to when the public were first sold shares for $11 in May, 2004.

Quanta on Friday declined to answer questions on whether the boost in director compensation was made in an effort to keep directors on board. Quanta has seen some of its most senior executives and directors depart since investors soured on the company after losses from last year?s hurricanes took a toll on its business plan, bottom line and creditworthiness.

The company last week said it had retained US investment bank Friedman Billings Ramsey, a founding investor that continues to recommend investors own the stock, to advise it on strategic alternatives, including selling all or parts of the business, or to close down.

Quanta declined to answer questions on how many times directors meet a year, or if they are now to meet more frequently. And it said its ?circumstances? did not leave it the ?luxury of individually replying to inquiries that sought additional information? including how many staff the company has, or how many in Bermuda could face job cuts under its plan to cut as much as $11 million in employee costs.

Directors are to continue to receive $30,000 a year to sit on the board, and for the first time established entitlement to $20,000 worth of shares each year. As before, directors will continue to receive 25,000 shares when joining the board.

Quanta declined to say whether the shares awarded to directors each year are issued in a way that dilutes the value of existing shareholders? holdings.

The company recently added two directors to its board to replace earlier resignations: Roland Baker, a retired insurance executive and Robert Shapiro, a lawyer specialising in insurance mergers and acquisitions.

The company is currently being run by an interim chief executive, after founding CEO Tobey Russ last year quit the company. Severance packages to Mr. Russ and other departing executives are $5.8 million of the company?s estimated fourth quarter loss.

Growing storm losses made a bigger dent on company results: Hurricane Wilma cost the company $12 million, and an additional $10.2 million in losses from Katrina and Rita were added in the fourth quarter.

As well, a bigger than expected environmental loss cost the company $5.5 million, and up to $13 million is being added to reserves the company holds in the event of claims on policies sold.