You take this employee into your office and have them sit down.
Then you explain that their work is not to the standards you expect. Be detailed on what you are looking for. Tell them you will be reviewing this again in 30 days and that if there is no improvement that they may be fired.
One of two things will happen. Either the employee improves or you find someone that will perform the work you want.
You might want to review the following:
As the owner of a small company there are numerous decisions you will be faced with every single day. The first question you need to ask yourself for each of these is: Is this decision critical to the success of my company?
If the answer is No, then delegate it away and don't worry about it.
However, the difference between writing complicated code and simple code can be a death bell for a small tech company. If your code is too complicated then it will be harder to maintain. If it's too simple then you might be throwing it out and replacing it far sooner than you hoped. There's also your exit strategy to consider. If you start looking for someone to buy your company, which path do you think they will prefer?
There's no right answer HOWEVER the question boils down to one of risk.
One such risk is that this person continues producing complicated code then leaves. The amount of time it would take a new developer, or yourself, to get up to speed could mean the difference between staying in business and closing the doors.
IMHO, at this stage you need to have an absolute iron fist on how you want things done. It's your company, remember that. At the end of the day these people depend on you to make sure they get a paycheck and they depend on you for direction. If you don't provide direction, they'll leave. If you're wishy washy then your company will fail.
I understand HLGEM's statement about "If you believe the person should have the freedom to determine how to do the work as long as the end result meets the standards, then you need to apologize to him for trying to interfere." and in a large company I would agree with that.
However in a small company like yours there is often very little room for failure and letting someone rebel against what you are trying to build simply will not work long term.