Who knows firms’ earnings first, and how does that information enter prices? This paper shows that rank-and-file employees incorporate information about contemporaneous earnings into their retirement-saving decisions before markets do. Using U.S. defined-contribution plan data from 2003 to 2023, we find that changes in employee ownership during fiscal year t predict earnings surprises for that same year, which are revealed only when earnings are announced in early year t+1. Stock prices adjust to this information primarily around the announcement window, generating short-lived abnormal returns. The effects are stronger when information frictions are high, disappear once plan disclosures become public, and are absent in sponsor-directed plans. These patterns indicate that employee allocations aggregate dispersed internal signals that markets incorporate with delay. The results highlight a previously unexplored mechanism through which internal information diffuses into asset prices.
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