Dividend policy is one of the important factors that supply the company's financial flows and operational activities. This study examines the determinants of dividend policy from the perspective of information asymmetry and institutional ownership. The research sample is the companies listed on Indonesia Stock Exchange that pay dividend consecutively from 2016 to 2020. The method of analysis is SEM-PLS operated with WarpPLS 8.0. The results showed that high information asymmetry between company management and shareholders encourages managers to reduce dividend payments for the purpose of providing company capital and production activities. Furthermore, the existence of institutional ownership supports managers' policies and prefers that company profits should be used to supply capital, not be distributed to shareholders. This finding is consistent with the pecking order theory and also implicates the need for a corporate governance system to be improved to give better protection to the investors.