The widening CEO-employee pay gap in US corporations and its mandated disclosure have generated significant debate. This paper investigates the implications of this disclosure on employee turnover, a pivotal determinant of organizational health and financial performance. Employing proprietary data on employee turnover, we find that firms disclosing larger pay gaps experience higher employee turnover rates. This effect is more pronounced for employees in lower-paying roles or junior positions. Further analysis shows prolonged open job vacancies in high-pay-ratio firms after the disclosure, suggesting prospective employee concerns over joining firms with pronounced pay disparities. Our study underscores the significant impact of CEO-employee pay ratio disclosures on human capital retention in firms, offering critical insights into the operational implications of pay disparities for policymakers, investors, and practitioners.