Deductibility of CEO Compensation

The CEO of Branyan Corporation, a publicly traded corporation, is paid a $3 million salary in the current year. How much of this is deductible by Branyan as a business expense?

1. All $3 million. Salaries are a deductible expense.
2. Salaries for senior executives are never deductible.
3. $1 million. Annual compensation paid to the CEO of $1,000,000 or less is generally deductible.
4. $1.5 million. One-half of employee compensation is deductible.