CTO vs. VP of Engineering
sah: It's normal for the VP Eng to be a peer of the CTO and report directly to the CEO.  That said, you are almost certainly being marginalized.  Your CEO likely knows he needs your irreplaceable understanding of the company's technology, but otherwise wants you out of the way.Replacing you as manager is probably not going to work out well unless he already has someone good in mind.  CEOs rarely understand how much difficulty they'll have identifying competent tech managers.  He's in danger of finding someone who does a great job of "managing up" and a poor job of getting things done efficiently and correctly.If you can't prevent the hire, making sure you hire someone competent is probably the most significant thing you can do for the company.