Where there's smoke, there's usually fire. Does this happen to anyone else on the team? If I were you, I'd (informally) ask others if this is a problem for them, and if it is maybe consider formally putting your foot down to the CEO.
If you feel there is any kind of legal route you can go down, I'd consider talking to a lawyer, in case there is anything that can be done. I'd also ask about the implications of being a whistleblower. One possible route could be to a local newspaper, ensuring that the entire town/city is aware that the company bullies its employees.
Failing all of this, if it's just someone being a bully, fight back. Challenge him on anything offensive he says, and respond back. Also, start cutting your hours back to the hours you're supposed to be working. Tell the boss that any failings in your work is down to him being a shitty manager, and that if he wants anything extra from you his boss either needs to put him on training, or to sack him and get someone that knows what they're doing.