MEMBER DIVIDENDS
As a cooperative, we distribute all of our profits and gains to our members in the form of patronage dividends. Here, we explain our member dividends in detail.
1. About patronage dividends
Cooperatives distribute all profits and gains to their members in the form of patronage dividends, which are distributed to each member in cash, in kind, or both in proportion to a specific measure of their transactions with their cooperative.
2. How we measure a member’s transactions with us
We measure a member’s use of our services for the purposes of calculating patronage dividends.
This is our formula for measuring a member’s use during any period of time:
Member’s use = outgoing service calls + incoming service calls
An outgoing service call is a member-initiated interaction with our services – like a mouse click or a screen tap – that sends digital data to us so that we can provide, customize, or improve our services.
An incoming service call is a service-initiated interaction with at least one of our applications on a member’s device that sends digital data to us so that we can provide, customize, or improve our services. These calls can be automatic and, for example, retrieve cookie, device, location, and stored usage data, in accordance with a member’s privacy settings and our Privacy Policy.
3. When and how we distribute patronage dividends
We distribute patronage dividends to each of our members in the event of a calendar-year profit or a one-time liquidity event.
Calendar-year profit equals net earnings for the 12-month period ending December 31st minus any cash reserves that we retain to reinvest in our business. Net earnings exclude donations, and our Board of Directors, which our members elect, determines the amount of cash reserves that we retain.
Calendar-year profit = all non-donation income - all expenses - cash reserves
For a calendar-year profit, we use the following formula to calculate each member’s dividend:
We define a one-time liquidity event as either an outright sale of our company to another company or a complete dissolution of our company.
Member dividend = calendar-year profit x (member’s calendar-year use ÷ all members’ calendar-year use)
If we get acquired by another company in an outright sale, we use the following formula to calculate each member’s dividend:
Member dividend = (purchase price - any liabilities) x (member’s use to date ÷ all members’ use to date)
If we have to completely dissolve our company, we use the following formula to calculate each member’s dividend:
Member dividend = the value of company assets remaining after all company obligations are paid x (member’s use to date ÷ all members’ use to date)
4. Member dividends before we release our web browser
Any member dividend will be distributed equally to each member prior to the release of our web browser.
5. Documents that govern our member dividends
Together, our Articles of Incorporation and Bylaws govern how we distribute dividends to our members.