On October 1, 2016, Farmer Fabrication issued stock options for 340,000 shares to a division manager. The options have an estimated fair value of $6 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in five years. Suppose that after one year, Farmer estimates that it is not probable that divisional revenue will increase by 5% in five years.

1. What is the revised estimate of the total compensation?