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Can anyone share their experience with an ESOP?
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I totally empathize, that's happened to me. All my teammates were promoted to a level above me, and I'm stuck, while I still deliver equal value. Perhaps you can ask your manager what the gap is in terms of your value compared to your coworker.
I would avoid saying you know about your coworker. That can put your manager on the defensive. Focus on your value instead.