Nick Clegg on Executive Pay

Nick Clegg the Deputy Prime Minister, in a televised interview, outlined some proposals regarding restraints on exorbitantly high executive pay - click here for the interview and details. 

Why does the government have the right to interfere in the internal workings of a company?  My perspective on this is a straightforward one - corporations can only exist in the first place because the State permits them to have the fiction of a separate legal personality, which enables companies to enter contracts etc. as if they were individuals.  In other words, the corporation is a creation of the State and, as such, surely the State has the right to interfere in its internal workings?  Whether such interference will be effective or efficient is an entirely different question. 

You can read my article with Charlie Hickson on the history of the corporation here.