One of the differences between a capitalist enterprise and a Corporate is the division of power between owners and managers. In the case of the big Corporates, a significant proportion of whose shareholders are other big Corporates, the executives are supreme. The normal rules of free enterprise capitalism just don't apply; true capitalist enterprises always put profit before turnover, whilst big Corporates for whom market share is measured in whole percentages are obsessed with size. The world of big Corporates is a world of acquisitions, mergers and takeovers in which the managers alone are the winners. So don't be misled into believing that either the Swiss referendum result on executive pay or the EU noises on bankers bonuses are a fundamental assault on capitalism; they aren't. Not only does Corporatism strangle free-market capitalism, it stifles innovation and economic growth.
The proposed legislation isn't directed at owners or shareholders of capitalist enterprises, who may continue to make as much money as they like without restriction. No, it's specifically directed at greedy employees who currently hold too much power over their own rewards.
Of course the threatened executives have lost no time in whining that such moves will damage national competitiveness in nations taking such moves; on behalf of the City's big money boys Boris writes in the Telegraph that "Some will say that
banking is indispensable to a global economy, and we will simply lose talent
to cities outside the EU – Zurich, New York, Singapore" (presumably penned before news of the Swiss referendum came in). It's rubbish. What they're actually suggesting is that over-powerful executives will make corporate domicile decisions on the basis of the magnitude of their own rewards rather than shareholder interests - QED the need for such measures.
The next necessary step will be to democratise decisions taken by fund manager on behalf of real shareholders - anyone with a pension fund. Otherwise Tarquin from Global Investments plc will just vote in support of Global Pharma plc's Rupert and his proposal to pay himself the GDP of a small developing nation.
Economists may argue quite correctly that such sanctions against a tiny fraction of top earners will make bugger all difference to either shareholder returns or national competitiveness and whilst true misses the point. It's really not about the money - it's about killing a cancerous culture that's simply not in the common interest.