We examine whether mandatory disclosure of participant-directed defined-contribution plans reveals value-relevant information embedded in employees’ retirement allocations. Using comprehensive Form 5500 data from 2003 to 2023, we study changes in employees’ holdings of employer stock in DC plans and test whether these aggregated allocation decisions contain information about contemporaneous firm performance not fully reflected in analyst expectations. We find that increases in employee ownership predict positive earnings surprises. We further show that this information is incorporated into prices in two stages: first around earnings announcements and then around Form 11-K disclosures that reveal aggregated plan holdings to investors. The relation is stronger when external information frictions are high and disappears in sponsor-directed plans. Overall, the evidence identifies this disclosure as an important involuntary disclosure channel through which aggregated employee information enters earnings expectations and stock prices.
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Employee Information