We investigate whether managerial rent extraction plays a role in the increasing manager-worker pay disparities in public firms. Utilizing granular individual-level compensation data from the U.S. Census Bureau, we find that managers experience substantially higher pay growth than rank-and-file workers during our sample period, even after accounting for worker composition changes. While pay growth differences align with market movements — as suggested by models like Gabaix and Landier (2008) — we also uncover evidence in support of managerial rent extraction. A rent extraction model predicts that pay growth disparities are asymmetrically more sensitive to positive idiosyncratic stock returns than to negative ones, and that this asymmetry is absent for returns driven by observable industry or market factors. These predictions are confirmed empirically. Additionally, we demonstrate that the asymmetry in pay growth disparities increases following exogenous reductions in corporate governance and is more pronounced in firms with less external monitoring by analysts or unions. Overall, our results suggest that rent extraction is one of the factors that contributed to the rising CEO-worker pay ratio.