The reality is that the labor is only worth 500k to the company. If the individual could extract the same 500K from their labor without the company, they would

The reality is that the labor is only worth 500k to the company. If the individual could extract the same 500K from their labor without the company, they would (hopefully). They don't because it's not purely the labor generating that value, but the capital invested along with that labor. Being a great programmer is worthless without a computer. I think a really good example is a story from Google. An intern changed the compression of the Google logo on the search page and shaved off a few bytes. Since Google serves that page billions of times, that saved google a 10's of thousands of dollars a year, and was literally minutes of work. If the same intern did the same work anywhere else, it would have been almost worthless.