[maxsanic]

The CEO at my previous company marginalised competent senior management whom he viewed as threats to his position, promoted incompetent cronies and suppressed any rising stars in the organization. He realised that the levelling down of talent would be his best bet to stay at the top over there. 

Then move on, what would be the point in working for someone like this?

And I might be getting ahead of myself, this "CEO" is probably not really a head of a large organization right? Otherwise chances are you won't get so much first hand intimate knowledge of him in the first place. If on the other hand you work in a large organization and all the info you have so far on the CEO is based on second or third hand knowledge, i.e. you are not one of the Exco senior management, then you should be careful with making broad conclusions like that.

I have seen many cases of junior management and below people getting a warp picture of what happens at the top because information gets twisted every time it gets filtered one level down.

Regardless of what it might be, it's probably a good time for you to pursue other opportunities. If what you say is true then your immediate professional circle certainly is not up to scratch and hanging around such bottom rung people will only worsen your situation.