Citrix Systems shareholders' approval of an executive compensation plan—one that did not denote a specific amount non-employee directors would earn—places the onus on the directors to prove the pay did not violate the entire fairness doctrine, Chancellor Andre G. Bouchard has ruled.

The Delaware Court of Chancery decision rejected the directors' arguments that the payments of restricted stock units should only face scrutiny as to whether they were wasteful given the shareholders already approved the general compensation plan for Citrix directors, officers, employees, consultants and advisers. Bouchard said the approved plan wasn't specific enough to avoid the entire fairness doctrine.

Bouchard had rejected from the start that the payment of stock options to non-employee directors could be reviewed under the business judgment rule, finding the directors were interested parties in that they set the compensation limits for themselves and couldn't avail themselves of the argument that their decisions were of sound business judgment.