Walt Disney chief executive Michael Eisner yesterday described the "elitist" attitude of former company president Michael Ovitz, recalling a corporate retreat when he arranged for a private limousine while the rest of the board was taking a bus.

In his second day of testimony in a shareholder lawsuit seeking to recover Mr Ovitz's $140m (£75m) pay-off plus interest, Mr Eisner said the former talent agency boss had difficulty adjusting to the Disney culture.

"He started to rub people up the wrong way," Mr Eisner said. "He was controversial and it got worse as things went on."

At the Disney World corporate retreat in January 1996, Mr Eisner said: "We'd all take a bus and he had a limousine, a special driver. Everybody had a walkie-talkie and you heard walkie-talkies around the 30,000 acres saying, 'who is this guy and why is he demanding this'."

At the retreat, he said there were "embarrassing, difficult moments that became the beginning of a cycle".

He added: "The perception was that Michael Ovitz was a little elitist for the egalitarian Walt Disney World employees in Florida. It was a bad vibe, let's put it that way."

Still, Mr Eisner defended his decision to hire Mr Ovitz in the mid-90s, a decision that led to one of the most expensive pay-offs ever seen just 14 months later.

Mr Eisner told the Delaware courtroom that the appointment of the Hollywood agent had met with an overwhelmingly positive press when it was announced in August 1995. Disney's shares had also jumped on the news, he said.

He also sought to downplay suggestions that the hiring had not been carefully considered. Mr Eisner said he had called all of the entertainment firm's directors individually to discuss the appointment and Mr Ovitz's compensation package before it was announced.

The trial has reopened a deep wound at Disney. The hiring of Mr Ovitz proved to be a disastrous mistake. During a tempestuous tenure he repeatedly clashed with Mr Eisner and the rest of the board.

Shareholders, left furious by the size of the pay-off, brought the lawsuit seven years ago but it only reached court last month.

Investors are complaining that Mr Ovitz should never have been hired in the first place and fired without compensation. He eventually left with a no-fault termination. In the lawsuit, the investors are looking to recoup $200m, the severance package plus interest, arguing that the board neglected its fiduciary duties.