[ninotheopsguy]

return "some vested equity"? I hope they return most of it, what a bad situation... the company now without one of its cofounders must be so different as to probably make it worth to found another one with just you (and the new CEO.)

The problem you are facing will be adjusted by the market (when you actually go try and get a new competent CEO.) That is, if you offer little equity you'll have no-one wanting to join and you will have to adjust. I imagine it should be a considerable portion.

But this is also not ideal, what about you being the CEO and CTO at the same time? Or, better, you being the CEO and hiring someone technically strong to do most of your "CTO" job (as head of technology)