Profit Distribution to Dividend-Earning Profiles

To follow the previous webpage of how profit is distributed to six different places, we need a little detail on the calculations that distribute profit to the dividend-earning profiles.

This calculation assumes that the articles allow a conversion from a regular profile to a dividend-earning profile with a $200 to $5000 fee. Five regular profiles made this conversion, giving Consensus %5200 shortly after launch.

The articles will stipulate that before Consensus directs funds to Consensus Foundation, it must first pay 50/ of stated capital to these five dividend-earning profiles. This comes to $2,600 ($5,200 ⨯ 0.50). And this $2,600 will be distributed according to the Influence for dividends each profile has.

Dividend Earning Profile	Investment made to upgrade profile	Influence	Pro-rata Calculation	Dividend
Dave	$500	196	500 ⨯ 196 ÷ 1000 = 98	$2600 ⨯ 98 ÷ 665 = $383
Fred	$200	63	200 ⨯ 63 ÷ 1000 = 13	$2600 ⨯ 13 ÷ 665 = $51
Susan	$1500	80	1500 ⨯ 80 ÷ 1000 = 13	$2600 ⨯ 120 ÷ 665 = $469
William	$800	78	800 ⨯ 78 ÷ 1000 = 62	$2600 ⨯ 62 ÷ 665 = $242
Sheila	$2200	169	2200 ⨯ 169 ÷ 1000 = 372	$2600 ⨯ 372 ÷ 665 = $1455
Totals	$5200	586	665	$2,600

While all five of these investors seem to have done quite well with their original investment, a few points need to be considered:

1. It may be several years after the investment is made before dividends are paid to these investors.
2. Unlike preferred share dividends, these dividends do not accumulate. If the dividend is not declared by the high ring in a particular year, there is no dividend for that year.
3. The dividend of 50% of stated capital is the incentive to get profiles to upgrade and put some much needed cash into Consensus at a critical time. A lower amount would not bring in as many upgrades.
4. The main incentive for the high ring to declare a dividend to the dividend-earning profiles is to legally clear the way to move funds into the Consensus Foundation. This condition will be stipulated in the CC articles. In this way, the dividend-earning profiles have some protected return for their investment.
5. Even though the return on a dividend-earning profile is quite high, the limited investment means no one is really going to get rich from Consensus. I suspect many dividend-earning profiles would prefer to sign their dividends away to the Consensus Foundation. The software should provide this option.
6. I estimate that the average long term return to the dividend-earning profiles will be about 10% to 15% per year.

Even when Consensus reaches financial stability, it should still allow profiles to upgrade to dividend-earning profiles. When a member upgrades her profile to a dividend-earning profile, there will be a second Influence calculation which will be based on the day of the upgrade, not when the member first joined Consensus. In this way, this member will need to wait several years before earning a reasonable dividend, thus not taking advantage of the earlier investors.