Final answer:
Energize, a publicly held corporation, can typically deduct ordinary and necessary business expenses such as salaries, bonuses, and retirement contributions. In Edith's case, her compensation package including all these elements totals $1,585,000, and thus the likely deductible amount for Energize would be $1,585,000, which corresponds to option 4.
Step-by-step explanation:
The question concerns the deductible expenses of Energize, a publicly held corporation, regarding the compensation package of its CEO, Edith. According to the given scenario, Edith receives a salary of $950,000, a bonus of $600,000, and contributions to her retirement plan of $35,000. The bonus was contingent on her threat to leave for a competitor, which implies it is a retention bonus and thus presumably a part of the ordinary business expenses. Without specific tax code references, under general business expense rules, all three components could be considered ordinary and necessary, thus potentially deductible.
Typically, businesses are allowed to deduct reasonable salaries and bonuses paid to employees if they are for services rendered and are an ordinary expense. The retirement contribution can also generally be considered a deductible expenditure as a benefit provided to an employee. Assuming there are no unusual limitations or clauses in the tax regulations that apply to Energize, the total deductible amount would be the sum of all three, which is $1,585,000. Therefore, based on the information provided and general principles of deductible business expenses, the correct option for Energize's deductible amount would be option 4, $1,585,000.