The history of dividends goes back over 400 years to the early 1600s, when the Dutch East India Company paid its common shareholders a portion of the profits generated from its trading activities in the far east. As time went on, more the public companies were formed by other investors and for different purposes, but with the committment that the company would share any profits generated by the venture, as dividends to the shareholders, based on the proportion of shares each investor held. The arrangement is not complicated.