When designing programs and incentives to attract and retain critical employees, deferred compensation plans warrant thoughtful consideration by hedge fund managers. Individuals who plan to remain with a firm for the long term often welcome these plans as a way to invest a portion of their income on a pre-tax basis and allow it to grow on a tax-deferred basis. Conversely, junior employees or those more fluid in their careers may prefer to receive cash compensation at the time it is earned. This two-part series provides an overview of deferred compensation plans in the hedge fund industry and key factors managers should consider when developing these plans. This second article examines how commonly these plans are adopted; discusses technical aspects of these plans, such as vesting schedules and forfeiture events; identifies categories of employees who are likely to participate in these plans; and reviews Section 409A of the Internal Revenue Code as it relates to these plans. The first article explored the intended goals of these programs and tax consequences associated with pre- and post-tax deferral plans. For discussion of other methods used by hedge fund managers to incentivize employees, see “Use by Hedge Fund Managers of Profits Interests and Other Equity Stakes for Incentive Compensation” (Apr. 18, 2014); “How Can Hedge Fund Managers Use Profits Interests, Capital Interests, Options and Phantom Income to Incentivize Top Portfolio Management and Other Talent?” (Aug. 22, 2013); and “Key Considerations for Hedge Fund Managers in Developing a Succession Plan (Part Two of Two)” (Feb. 23, 2012).