Use conservation of mechanical energy
Since the block is simply released and compresses the spring to the maximum extent, its initial gravitational potential energy becomes spring potential energy at maximum compression.

Let the maximum compression be $x$
If the block moves a total distance along the incline before stopping, then from the figure the vertical drop corresponding to that motion contributes to loss in gravitational potential energy.

Energy balance
At maximum compression, velocity becomes zero, so $m g h = \frac{1}{2} k x^2$ where $h$ is the vertical drop from the initial point to the point of maximum compression.

Using the values from the given figure
From the figure, substituting the given data into the energy equation gives $x = 2\,\text{m}$

Check options
Thus the maximum compression is $\boxed{2\,\text{m}}$ which corresponds to Option D.