First, while everyone thinks the CEO is the boss, they aren't. They are hired and fired by the Board of Directors. The Board has a strategic objective for the company and has tasked the CEO with making that strategy reality
Unless the CEO also sits on the board of directors ... but at least they won't be making the decision unilaterally.
If the competitors developed a highly wanted feature before you, either you were already in the process of developing it, can do so quickly (and let's say it's not patented or other legal issues), or if not, it's better IMHO to spend time to do it better then your competitor, or to come up with some even more compelling feature, to regain the lead. Of course, they'll try to do the same and so on.
So, more like:
CEO: competitor X just released Y, how can we make something better to get ahead? how quickly can we get that?
CTO: hold my beer
(actual dialogue irl might be a bit different 😄)