The subject was a major topic of discussion at Thursday's annual shareholder meeting, which also served as a send-off for retiring Chief Executive Jim Skinner - whose nearly eight years at the helm will be remembered as a time when the price of McDonald's stock tripled.

The shareholder proposal, which also failed last year, returned amid growing concern over the social and financial costs of obesity in the United States and around the world - not only in terms of healthcare-related expenses but also lower worker productivity and diminished quality of life.

Nearly one-third of U.S. children are overweight or obese. America is one of the fattest nations on earth, and the Institute of Medicine, in a 2006 report requested by Congress, said junk food marketing contributes to an epidemic of childhood obesity that continues to rise. The institute is the health arm of the National Academy of Sciences.

McDonald's executives on Thursday defended the brand and its advertising.

"We're proud of the changes we've made to our menu. We've done more than anybody in the industry around fruits and vegetables and variety and choice," said Skinner, who will retire on June 30 and who received a standing ovation from investors.

While the chain has added food like salads, oatmeal and smoothies to its menu, it has pulled ahead of rivals and delivered outsized returns for investors with help from its core lineup of fatty food and sugary drinks.

Corporate Accountability International, a business watchdog group, for the second year in a row backed the obesity proposal, which was endorsed by 2,500 pediatricians, cardiologists and other healthcare professionals.

It called on the company to issue a report on its "health footprint." The document would evaluate how diet-related illness would affect McDonald's profit.

Dr Andrew Bremer, a pediatric endocrinologist and professor at Vanderbilt University School of Medicine in Nashville, presented the proposal at the meeting and said McDonald's has chosen to employ "countless new PR tactics" that create a perception of change while "unreasonably" exposing shareholders to significant risk.

"It is not enough to point to so-called healthier menu items when children are still the target of aggressive marketing of an overwhelming unhealthy brand," Bremer said.