Chelsea went on the offensive at an employment tribunal yesterday, as the club's chief executive, Peter Kenyon, began giving evidence.
Kenyon told the London Central Employment Tribunal that Paul Smith's six-figure salary claims were "unrealistic" and denied agreeing to pay him various lump sums during salary negotiations.
The club faces a claim of £366,000 from former group business affairs director Smith for unlawful wage deduction. He is also planning High Court action to claim more than £1m in total.
Smith was employed at Chelsea in 2004. He claims he started as interim chief executive, but the club denies this.
He was dismissed in 2007 when his position became redundant and he had never signed an employment contract. Kenyon told yesterday's hearing that a number of alleged conversations about Smith's salary did not take place.
This included an encounter in which Smith claimed Kenyon was "hungover" and had offered him a salary of £500,000 and bonus of £250,000 because he was feeling "mellow".
The chief executive also said: "I do not believe that Paul made a genuine effort to have an employment contract agreed."
He added: "The amount Paul was asking for was simply out of line with his value in the marketplace."
Smith has claimed that attempting to negotiate a contract with Kenyon was like "trying to nail jelly to a wall", but he did not approach other board members about the issue.
Kenyon said: "I can't see why he never raised the matter with the other board members over the period in question," later adding: "At no point during his employment did Paul Smith raise a grievance in relation to these sums, which is surprising given the size of the sums involved."
Kenyon said he had tried to make Smith sign a contract because it included provisions such as agreeing to confidentiality. He added: "This seemed to be more about a matter of money for him than anything else."
Part of Smith's claim is for unpaid bonuses, but Kenyon said there was no bonus scheme for club executives.