Manuscript　Type:　Empirical　Research　Question/Issue:　This　paper　investigates　the　influence　of　CEO　compensation　on　voluntary　turnover　and　the　moderating　role　of　the　managerial　labor　market.　It　explores　how　institutional　contingencies　related　to　labor　market　transparency,　mobility,　and　competitiveness　shape　supply　and　demand　conditions　of　the　managerial　labor　market,　and　consequently　affect　the　relationship　between　CEO　underpayment　and　turnover.　Research　Findings/Insights:　Using　a　sample　of　Chinese　listed　firms　between　2002　and　2011,　we　document　that　underpaid　CEOs　are　associated　with　a　larger　likelihood　of　voluntary　turnover　in　China.　Importantly,　we　find　that　CEO　underpayment　will　increase　the　likelihood　of　voluntary　turnover　to　a　greater　extent　when　executive　compensation　disclosure　is　mandatory,　when　regional　labor　mobility　is　higher,　and　when　industry　growth　rate　is　larger.　Overall,　our　study　demonstrates　that　underpayment　below　the　market　rate　motivates　CEOs　to　exit　their　organizations　and　such　a　reaction　is　more　likely　to　materialize　when　managerial　labor　market　conditions　are　favorable　enough　to　create　a　strong　pull　force.　Theoretical/Academic　Implications:　This　study　adopts　an　interdisciplinary　perspective　built　on　institutional　theory,　organizational　psychology,　and　labor　economics　to　examine　the　role　of　the　managerial　labor　market　during　institutional　transition.　It　integrates　the　social　psychological　explanation　of　turnover　with　the　perspective　of　labor　economics　by　linking　both　pull　side　and　push　side　drivers　of　organizational　participation　with　demand　and　supply　conditions　of　the　managerial　labor　market.　Practitioner/Policy　Implications:　This　study　suggests　that　the　design　of　executive　compensation　should　consider　the　ongoing　labor　market　rate　for　retention　and　motivation　reasons,　especially　when　managerial　talent　is　under　tight　supply　and　strong　demand.