How do producers make compilations for release?

Like others on this forum, I have eclectic music tastes and maintain my desire for well recorded material - hence my passion in audiophile equipment. Therefore purchasing compilations can be a win win.... up to a point.  How do they make compilations? Is it the record companies with master tapes or is it a third party splicing together tracks they have?

I’m of course referring to legitimate releases, but need to know as I could be risking purchasing sub par quality, when getting the original releases could be better and I could make the play list as the compilation!