Delaware case exposes director compensation to heightened “entire fairness” standard absent adequate stockholder ratification -

The Delaware Court of Chancery recently decided a case that makes it easier for plaintiffs to sue companies for their director compensation. The decision, in Calma v. Templeton, denied a motion to dismiss a breach of fiduciary duty claim based on Citrix Systems, Inc.’s past director equity awards. The Court of Chancery held that the business judgment rule does not apply to such awards, which must instead be reviewed under the “entire fairness” standard, even if stockholders previously approved the plan under which the directors received their equity awards.