It is rare the artist that retains the rights to unreleased material. It is possible to include a provision in an artist’s contract that stipulates that, should the label fail to release the recording, the artist then retains the copyright to that recording. However, this is rare and the record label usually owns all of the contracted artist’s material for (usually) fifty years or so.
Agree or disagree the record labels reasoning and justification for these practices is their claim that it takes a great deal of upfront investment to record, release and promote a recording. As Rok points out, they are a business and in the business of. making money. Having said that, I think it’s important to remember that if the label doesn’t make money, no artist makes money (from recordings). I don’t believe that a record label sets out to NOT release a recording and then save it until the artist has passed in an effort to make money. They don’t release a particular recording because they don’t feel it is commercially viable AT THAT PARTICULAR TIME. Contrary to popular belief here, some artists DO make and HAVE made inferior recordings. I use this example not to start yet another war here, but as an expression of my viewpoint.
The often discussed great (and he was) Grant Green made recordings late in his career that where, in my opinion, considerably inferior to his classics. The most recently posted clips of his work show an artist going into a (soul-funk-whatever) genre that was populated by some pretty stiff competition like George Benson and Wes Montgomery; players who were receiving a lot of attention and backing. Importantly, for some reason, his backing bands in these later recordings sometimes left a lot to be desired, imo. Case in point, the recently posted "Live At The Lighthouse". Whose idea was it to hire Claude Bartee for that recording? Who knows. But it was not a good choice; he sounds absolutely awful on soprano saxophone. I can see a scenario where label executives would decide to not release a recording like that because there was so much other music in a similar bag being released by them or other labels. I hate posting recordings of what I consider inferior music, but simply to make a point here is a recording that, to my way of thinking, one has to wonder "what where they thinking?"; and almost twenty minutes of it!! Terrible horn arrangements. Sometimes artists make bad choices; sometimes producers make bad choices or decisions. Simple as that.
https://m.youtube.com/watch?v=zKVvBHusoMYEven the great Michael Brecker's solo sounds a little "dialed in".