CORRECTED - AT&T CEO gives up 2008 bonus

(Corrects paragraph 2 to show that AT&T said in December it would cut jobs, not earlier this week)

NEW YORK, Jan 30 (Reuters) - AT&T Inc (T.N) Chief Executive Randall Stephenson will forgo his 2008 bonus payment, and the company will freeze the salaries of 120,000 managerial employees this year, as the telecommunications company prepares for a grim year.

Stephenson's decision, which he sent to employees in a memo on Friday, comes after the largest U.S. phone company said in December that it would cut 12,000 jobs, or 4 percent of its workforce.

"Randall Stephenson today asked the AT&T Board that he not be awarded the bonus he earned based on last year's performance against the targets set," AT&T said in a statement sent by a spokesman.

Stephenson's annual bonus target generally accounts for more than 25 percent of his total compensation, AT&T said, without giving more details. In 2007, his bonus was $4.5 million, according to a company filing with U.S. regulators.

"We are committed to doing all we can to help preserve and protect jobs, and this is one way to do it," AT&T said. "It was not an easy decision, but it's the right one given the environment."

Stephenson is the latest in a group of executives who have lowered or given up their bonuses as millions Americans have lost their jobs in recent months.

On Thursday, U.S. President Barack Obama criticized as "shameful" the $18.4 billion in bonuses paid to Wall Street executives last year, even as they helped trigger the crisis.

AT&T shares fell 9 cents, or less than 1 percent, to close at $24.62 on the New York Stock Exchange. (Reporting by Robert MacMillan, editing by Matthew Lewis)