Watford rejected Everton's approach for manager Marco Silva, according to multiple reports on Monday.
Silva, 40, joined Watford this summer after Hull City were relegated under his watch last season.
But after his first 11 games in charge at Vicarage Road he has the Hornets ninth in the Premier League table with four wins, three draws and four defeats.
Watford are four points and six places ahead of Everton, who sacked Ronald Koeman last month and are being led by under-23 boss David Unsworth.
But Watford have reportedly refused to part ways with their Portuguese manager after representatives of Everton owner Farhad Moshiri made enquiries on Monday, according to The Telegraph.