Correct. However, I'm going to change it to the first payment requiring confirmations > masternodes*90%. So if there's 1000 masternodes a new node will have to wait 900 confirmations to be entered into the lottery. Then after that it'll be 1 of N. All future payments beyond that will be on a schedule with -10/+10% variance.

Confirmations to start a masternode will be 15. You just can't get paid until much later. It should provide a good mix of security and stability of payments.