In a large bowl, with a mixer on high speed, beat butter and 1 cup sugar until smooth. Add eggs one at a time, beating well after each addition. Beat in lemon peel.
In a small bowl, mix flour, baking powder, salt, and nutmeg. Stir half the flour mixture into the butter mixture, then add the milk, followed by the remaining flour mixture; stir just until incorporated. Scrape batter into a buttered and floured 8-inch square glass or ceramic baking pan and spread level. Overlap plum slices in rows or concentric circles over batter. In a small bowl, mix remaining 2 tablespoons sugar and the cinnamon; sprinkle evenly over plums.
Bake in a 325° regular or convection oven until a wooden skewer inserted in the center comes out clean, 45 to 50 minutes. Serve warm or at room temperature.