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My guess is that your salary fit into the band of the lower title. And somebody thought they were doing you a favor by creating room for promotion. Very odd that nobody would have said anything, though. You mention salary is as promised. Are there any other differences, like number of options,bonus calculations, etc?

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I suspect it's something along these lines, that the OPs salary and title somehow aren't lining up. Either what you describe or the opposite where their salary was higher than their level specified and the offer letter was fudged.

The former is probably a good situation to be in. The latter is less good as even if one gets the promotion to that next level, if you're salary is already in that band you won't see a corresponding pay increase.

Nope, everything monetary was just as agreed. It's an interesting take and I haven't though about it this way. I have always seen it as a sign of mistrust from the company, which had its consequences on morale etc.

The "extra cycle for a raise" is an upside. You can get promoted into something you're already qualified for. Though I get that there's downsides. Some loss of positional authority, maybe issues getting a new job at a place that uses similar names for levels, etc.

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