Mark - I went with 2 who I do not directly report to. But both have MBAs. My direct supervisor is not in a position where she would be able to discuss my potential as an MBA candidate because she lacks the education and personally I dont feel I will get what I need out of her.
Schools talk a big game about getting one from your direct - but if you have one from the CEO, CFO, or Chairman of the Board, I really dont see how schools view that as a minus. It shows you are connected and thats what they want.
On the flip side, having the CEO write nice things about you if you dont report to them might not do much to help your cause because they might see it as fluff. Personally, I would get the best recommendation you can - if its not from your direct then dont worry about it.